2021 Was Record Year For Crypto, Will Ethereum Overtake Bitcoin In 2022?

India's crypto market grew 641% from July 2020 to June 2021, helping turn a region spanning central and southern Asia and Oceania into one of the world's fastest-growing cryptocurrency markets.

(Representative Image/Getty)

New Delhi: Crypto is on the verge of becoming a mainstream asset as its market cap surpassed $3 trillion in 2021, the US SEC approved its first bitcoin ETF, the NFT craze boosted digital doodles to multi-million valuations, and the Indian government tabled a bill to regulate the digital asset. 

India's crypto market grew 641% from July 2020 to June 2021, helping turn a region spanning central and southern Asia and Oceania into one of the world's fastest-growing cryptocurrency markets, according to a Chainalysis report from October. 

Bitcoin Versus Gold

Bitcoin's estimated share of gold's $11 trillion market cap at the peak of its bull run on November 10th, 2021. On that date, Bitcoin reached an all-time high of $68,721, indicating a year-to-date gain of 120% and a market capitalization of about $3 trillion. Bitcoin's overall market capitalization was roughly 2.8% of gold's three years ago. In 2021, though, bitcoin was far from the best-performing crypto asset.

While bitcoin's 'digital gold' narrative has found a receptive audience, given that its rise corresponded with record levels of inflation. Bitcoin still trades erratically, making it essentially untouchable for anyone looking for asset purchases that will allow them to sleep comfortably at night. 

"The digital asset class garnered the most interest from many stakeholders in 2021, including investors, developers, institutions, central banks, and, most crucially, governments. As the world prepares for Web 3.0, 2021 will be remembered as the year when crypto truly took off, gaining public acceptance and upending everyone's perception of money," Sumit Gupta, Co-Founder & CEO at CoinDCX, told ABP News. 

Ethereum

Ethereum, a versatile platform that can handle any transaction, has risen 443% in the previous year, outpacing many competitors, including Decentralized Finance (DeFi) tokens and non-fungible tokens (NFTs). 

"Ethereum is not as widely known as Bitcoin, but it should be. Currently, Ethereum is the second-largest cryptocurrency, and its gains have been outpacing Bitcoin's. If current trajectories continue, Ethereum may overtake Bitcoin as the most valuable cryptocurrency sometime in 2022. Investors, keep your eyes open," Raj Kapoor, Founder - India Blockchain Alliance and Chief Growth Officer at Chainsense LTD, told ABP News. 

NTFs

NFTs took the world by storm in 2021, but that will be a dot on the map compared to the explosive growth we will see in 2022. 

In 2022, NFT will continue to be a prominent topic and will disrupt the gaming, art, and creative industries, among others. 

"Everything up to now has been about digital-only NFTs, but the next phase of NFTs and area of growth we are seeing is major brands looking to merge the physical and digital worlds," Daryl Kelly, CEO of LTD.INC told ABP News. 

LTD.INC helps blue-chip artists, brands & creators launch products that exist in real life and digitally in the Metaverse, allowing them to bridge the gap between the physical and virtual economies. 

"Owning a rare or valuable item in real life is cool, but being able to verify ownership in front of millions of digital followers and admirers with a digitally backed version, is where we're heading.," said Kelly. 

Profile Of Indian Users

According to CoinSwitch Kuber, crypto adoption saw an encouraging growth among Indian women. As of today, 15% of our total user base comprises women.

People from cities like Delhi, Kolkata, Pune, Mumbai, Lucknow, Patna became the early crypto adopters.

"Nearly 60% of our user base is less than 28 years old. While many Indians are starting their asset investing journey, increasingly 45-year old plus stock market enthusiasts are experimenting with this high-risk, high reward asset class," said CoinSwitch Kuber, India's leading and most valuable crypto unicorn, with over 14 million Indians. 

What Lies Ahead

One of the key developments in 2021 was the acceptance of crypto as a store-of-value asset or traditional institutional investors offering crypto services to their clients. This is just the beginning of huge financial institutions giving crypto to their customers, and it is expected more to follow in 2022.

The year 2022 would also see significant growth in public knowledge and education of Bitcoin, particularly among Millennials and Gen Z, due to their growing interest in crypto, according to Gupta. 

Nations worldwide are looking at the possibility of launching and examining a pilot program for their national digital currency. There's a good chance that 2022 will be the year when other countries create their own CBDCs.