5 Key Trends to Watch in 2022 According to Grayscale CEO

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In the coming year and in the future, the cryptocurrency world will continue to see infrastructure development, protocol proliferation, metaverse expansion, non-fungible token (NFT) evolution, as well as increased regulation, according to Michael Sonnenshein, CEO of leading digital asset investment firm Grayscale.

In a letter to investors, the CEO took a moment to look back, saying “it is remarkable where we are today compared to 12 months ago.”

Crypto and Web3 are receiving increased attention and acceptance from the media, regulators, legacy financial institutions, and world leaders. Thus, cryptocurrencies are continually increasing their footprint and are “weaving more into the global economy,” according to Sonnenshein.

As for his look into the future of cryptocurrencies, the CEO says he’s focused on “the big picture,” listing five key trends to watch in 2022 and beyond:

1. Development of the encryption infrastructure

The digital economy requires tools and services that facilitate the access and use of cryptocurrencies, which is why the cryptocurrency infrastructure will continue to grow. This includes exchanges, wallets, and analytics software.

“As the crypto economy and existing financial markets become increasingly intertwined, these are likely to provide some of the most attractive long-term investment opportunities.”

2. More protocols than ever

The increase in the number of different encryption protocols is “staggering” and is not slowing down, finds the CEO.

“Sorting these protocols for separating the wheat from the chaff remains a challenge, and requires in-depth knowledge of both the technology and the market.”

3. Expansion of Web3 and the metaverse

The Web2 experience is defined by large centralized corporations, where users are the product and the means of generating revenue, argues Sonnenshein. On the other hand, Web3, which, according to the CEO, includes the metaverse, shows opportunities for a digital future where users control their data and their fingerprint in all “focal points of social engagement”, such as commerce, games, entertainment. , news and social networks.

“Web3 changes the script and empowers users in a revolutionary way.”

4. NFT use cases beyond digital art

According to the CEO, the current iteration of NFT is limited, primarily to digital art; however, this will change as they continue to evolve over the years to “more sophisticated” use cases. This will especially be seen in areas such as authenticity, provenance and ownership, as well as in all sectors, including fashion, music, games, real estate and ticketing.

“The public discourse and momentum around NFTs demonstrate the material value of digital verification.”

5. New regulation and policies

Grayscale finds that more regulation is inevitable and beneficial. Sonnenshein argues that we have never before seen the involved and articulate regulators and legislators about the crypto ecosystem as they are now.

“This allows the conversation to shift to how these new technologies, when provided with the appropriate regulatory frameworks, can flourish, keeping crypto companies in the United States and setting a global standard for the regulation of cryptocurrencies.”

Going back to the CEO’s comment on how far the industry has come in just one year, he also pointed out that it’s easy to forget that we are still in the early days, and this is the most exciting part of crypto, he says.

Losing sight at this early age, Sonnenshein argues, “leads many to make predictions that are premature or unfounded.” For example, he says that digital assets and / or the metaverse will not replace the physical world or traditional asset classes, but rather augment them, stating:

“While the path of the digital economy is relatively unknown, our reality is increasingly a fusion of the analog and digital worlds.”

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