2021 opened the floodgates of the crypto sector, and countries all over the world were forced to grapple with the rise of this technology in its myriad forms. With crypto journalists reporting on everything from El Salvador’s volcano bonds and MicroStrategy’s Bitcoin stash to ape NFTs and CBDCs, an everyday investor might struggle to pick out the most important trends for 2022.
To that end, the CEO of Grayscale published a letter sharing what the crypto investment company will be watching this year.
Time to scale things down
In his letter, Michael Sonnenshein listed five trends and growth areas that his company would be tracking. They were crypto infrastructure, the rise of crypto protocols, Web 3 and the metaverse, NFT use cases apart from art, and regulatory action. Sonnenshein noted,
“Crypto infrastructure, such as exchanges, wallets, and analytics software, will continue to be a key growth area.”
The CEO also promised “more diversified and thematic funds.” But when discussing NFTs, Sonnenshein’s letter seemed to suggest that Grayscale had higher ambitions for the medium than just pretty pictures. He remarked,
“We expect to see a blending of the physical and digital worlds even further, particularly around topics, like authenticity, provenance, ownership, and more – and across sectors, including fashion, music, gaming, real estate, and ticketing. Our team is paying close attention to the evolution of NFTs.”
It’s also important to note Grayscale’s attitude towards new crypto regulation as expressed in the letter. Sonnenshein commented that these measures would ultimately be “beneficial” and he praised regulators for their involvement in the space.
Transformers: Rise of the GBTC ETF
Sonnenshein’s letter appears hopeful, but it strikes a far different tone from a letter sent late year, in which Grayscale addressed the SEC. This was in order to support its Form 19b-4 proposal, which would transform its GBTC offering into a Bitcoin Spot ETF. In the letter, Davis Polk & Wardwell LLP wrote,
“The Commission has no basis for the position that investing in the derivatives market for an asset is acceptable for investors while investing in the asset itself is not.”