There is nothing more powerful than an idea whose time has come. Crypto is becoming more mainstream every day as more institutions and countries adopt it. The rise of crypto is not just because digital asset prices are increasing. Although that is certainly a factor, it is more because the technology to transmit value digitally is now ready and entering a maturity phase. We are seeing a convergence of technology and money, and this is why I think there is still a lot of value to be captured.
2021 was a historic year for crypto. Global adoption rates have doubled, and prices of most digital assets reached all-time highs. More importantly, we saw a clear shift towards mainstream adoption of crypto as a legitimate investment class. Companies like KPMG, Square, Tesla, and Microstrategy are HODLing bitcoin on their balance sheets. El Salvador became the first country to recognize Bitcoin as legal tender. Non Fungible Tokens (NFT) sales volume totaled $24.9 billion in 2021, compared to just $94.9 million the year before! and January 2022 set an all-time high of over $7 billion in NFT sales for the month. Arguably more indicative than any of the above is the flood of venture capital money entering the crypto world.
In 2021, around 1,700 venture capital (VC) deals poured $25.1 billion to fund crypto startups, a 719% increase over 2020! 65 companies achieved “unicorn” status (over 1 billion valuations).
2022 is not showing any signs of slowing down, as January saw a record $5 billion of VC money enter the crypto market. All of this while crypto adoption in the world is only at 3.9%, which is the same percentage of internet users in 1999!
In the digital world, money is cryptocurrencies, and property is NFTs. NFTs, though is a whole different rabbit hole, worthy of its own post that we can explore next week.