Having surpassed Tencent and Alibaba, Bitcoin has reached $1,126.6 billion in market cap, overtaking Tesla as the 6th most valuable asset, according to the global ranking on Asset Dash. Compared with the $578 billion market cap in November 2020, the value of the global crypto market has soared by five times, drawing the attention of global investors.
New investment opportunities amidst the Covid impact
COVID-19 has hit the global economy harder than expectations. The Covid outbreak and the measures to control it have led to economic shutdowns and operating losses. Against the background of globalization, as countries continue to suffer from the pandemic, global demand has taken a fatal blow. During the public health crisis, institutional demand for Bitcoin has soared. Additionally, the multi-billion Bitcoin and crypto asset management company Grayscale has announced the largest quarterly funding streams in its history, approaching $1 billion.
Due to the panic selling in traditional investment markets and the Covid blow, some markets have remained sluggish. Things have got to a point where the returns on conventional assets are sometimes even more volatile than those on crypto assets, whereas the crypto market, where trading remains active for 24 hours a day, effectively responds to volatility.
The immense investment potential of the crypto market that stays open 24/7
Since October 2020, investors have flocked to the field of crypto assets for a hedge against inflation. As a result, the prices of Bitcoin and Ethereum have surged by more than 30%. Meanwhile, the market trends of non-fungible tokens (NFTs), new blockchain projects, and emerging cryptos such as Solana and Shiba (SHIB) have also sparked the interest of investors.
As of November 18, among the trending cryptos in the past year, Dogecoin recorded the highest growth rate of 7,821%, followed closely by Solana with an increase of 7,238%, according to data from CoinEx. Compared with the conventional investment market, the prices of both gold and real estate have dropped in the past 12 months. Moreover, crypto assets have even outstripped crude oil futures. Driven by the universal price surge in the crypto market and high ROIs (return on investments), droves of traditional investors have forayed into the world of cryptos. As a currency with real future potential, cryptocurrency has earned extensive market recognition.
A year ago, you could buy a bitcoin for about $12,000. However, in November 2021, a single bitcoin is worth more than $59,000, an annual increase of 391%.
Just this month, the Bitcoin price has reached $68,000, another record high. Since its launch, Bitcoin, the world’s first crypto asset, has surged by more than 762,499,900% in value. At the same time, returns on other crypto investments also far exceed the ROI of conventional assets. The incredible rewards have attracted many institutional and individual investors in conventional finance.
The best crypto investments in 2021, ranked by ROI:
The above price statistics are retrieved from the CoinEx website.
The investment shift towards cryptos in conventional finance
According to data from CoinShares, as of November 8, as investors buy more cryptos against broader government acceptance and strong crypto momentum, funds going for Bitcoin products and funds have reached $6.4 billion, a historic high. Additionally, 68% of global high-net-worth individuals would have already invested or would be planning to invest in cryptos by the end of 2022, according to a survey by Dubai-based financial consultancy firm deVere Group.
Investors are drawn to the crypto space by four major factors:
- Cryptos are borderless assets that can be used anywhere in the world;
- Cryptos meet the overall trend of increasing digitization;
- Cryptos provide solutions to real-world problems, such as cross-border payments;
- Millennials are embracing cryptos.
Driven by the NFT boom in 2021, Solana has evolved into the 5th largest cryptocurrency by value, with a market cap of over $65 billion. The crypto community abounds with stories of massive profit. Over recent months, many things have happened in the crypto market: MicroStrategy invested its treasury assets in Bitcoin; Bitcoin futures ETF started trading on the New York Stock Exchange; China Telecom, China Mobile, and Facebook, three major businesses, raise the stakes for metaverse infrastructure. Driven by these big crypto stories, the market has impressed investors with continued surges. As such, Bitcoin may soon enter mainstream markets. In the future, an increasing number of people will become familiar with Bitcoin and accept it as part of their investment portfolio.
Projected crypto trends in 2022
- Blockchain infrastructure:
The successful listing of Coinbase on NASDAQ shows that equity investment could work for cryptos. There are no longer any obstacles preventing traditional investors from going into the crypto market. In the next two years, droves of traditional venture capitalists may flock into the crypto space. As equity investment becomes a new crypto trend, another investment model has also emerged — the “equity + token” portfolio investment model. In the coming years, many start-ups will become the blue-chips in the crypto market. In 2022, the key for investors is to identify the critical segment, the outstanding players, and the best project teams.
- Crypto native ecosystems:
Public chains have built an enabling infrastructure for innovation. In light of this, intermediaries like oracles may also evolve into an ecosystem of chains and applications. A case in point is that DeFi, NFT, and games have also built their own micro-ecosystems. Investors should adopt a broad, segment-specific perspective and look for ecosystems with “real users”.
- Key innovation:
In the search for the blue ocean, investors must keep track of the latest trends and analyze and create new paradigms. Finally, they should also be confident and brace themselves for what is ahead.
Today, the trading volume of the crypto market has exceeded $16 trillion, surpassing the annual trading volume of Facebook, Apple, Amazon, Netflix, or Google. It is the best of times; it is the worst of times. Investment in cryptos has become an unstoppable trend. The surge of crypto assets is expected to continue next year. As an emerging value asset born for the future, cryptocurrency is growing into a possible method to guard against inflation.
*This article may not be relied on as any investment advice.