Crypto exchanges play a vital role in the crypto ecosystem – and give their teams a bird’s eye view of the industry.

Most everyday users will have more contact with a crypto exchange than any other sector in the space. As a service provider, exchanges are pretty objective – they don’t have any vested interest in schilling a particular asset or segment of the crypto economy. And many have been in the crypto game for a very long time.

As such, it was only natural for Stockhead to reach out to Australian and international exchanges to get a sense of what they expect for the coming year, as part of our weeklong Crypto 2022 series.

Third-generation assets go mainstream

Caroline Bowler, the chief executive of Melbourne-based crypto exchange BTC Markets, says that crypto has now found a legitimate role in asset diversification and construction, and predicts even more institutional money will move into the crypto space next year.

“This is also because more accessible products such as ETFs are being launched and industry regulation is imminent,” she says.

“We see widespread acceptance of cryptocurrency will be inevitable and strong support for sustainable growth in cryptocurrency markets is coming through.

“The key point to remember is that despite its sceptics and naysayers, the Australian cryptocurrency market is in the next stage of its evolution.

“Bitcoin may have been the first cryptocurrency to reach the mainstream and the most popular for many years, but the market is evolving to focus on second and third-generation crypto assets.

“We anticipate 2022 to be that year. Ethereum has had many rivals as ‘the’ utility platform for the blockchain economy. Its success has also brought along challenges, as transaction fees grew exponentially in the rapidly expanding and popular blockchain.

“The demand for such utility platforms continues unabated. The growing market size grows the pie, and we anticipate real competition in this space over the next 18 months. Expect to hear more from the likes of Solana, Polkadot and Cardano.

“The battle for Web 3.0 is only beginning.”

‘The biggest year for crypto yet’

“I see 2022 as the biggest year for crypto yet in terms of mainstream investor adoption, regulation and crypto integration into business,” says Leigh Travers, chief executive of Binance Australia, which provides a fiat on-ramp for Australians into the global Binance ecosystem.

“Relative to traditional finance, crypto will move towards sustainable initiatives such as creating a net positive carbon industry – encouraging ESG conscious investors and corporate partnerships.

“Regarding financial institutions entering crypto next year, I believe this is the year traditional investors will understand that the Central Bank Digital Currencies (CBDCs) will complement crypto rather than compete. This will also trigger merchants to start accepting crypto as payment at scale.

On meme coins:

“I don’t think the ‘meme-coin mania’ will be over just yet as we continue to see stories of meme-coin millionaires surging, however, there will be more established projects on the rise as crypto emerges into industry verticals like gaming and art, following on from the growth in finance since 2017.

“Finally, with all the growth coming through, the top university offerings will begin to offer crypto courses and we will see crypto as a core component of financial education.”

NFTs to evolve dramatically

Helen Hai, the head of Binance NFT, the global Binance Group’s NFT marketplace, expects increased mass adoption, more “gamefi” – the merging of finance and gaming – and other use cases for crypto in 2022.

“Next year, we will see more NFT models with the potential to disrupt industries like music, ticketing, entertainment, etc.,” she told Stockhead.

“Also, there will be further integrations of the real-world events to NFTs.

“Real-world data such as weather data, stock data can flow into NFTs and can have an impact on the NFT market itself.”

Igneus Terrenus, the head of communications at Singapore-based crypto exchange Bybit, is also expecting big things from non-fungible tokens in 2022.

“Judging by the anecdotal conversations we have been hearing, there will be a plethora of NFTs of digital collectibles and in-game assets arriving in the coming year,” he tells Stockhead.

“Many IP owners and cultural institutions have been fine-tuning their NFT strategy for a while, and are now ready to make a splash.”


A spot Bitcoin ETF ‘could be a top signal’

“While there’s plenty of hesitance in the air right now, we predict that 2022 will see the return of bullish momentum to the crypto markets,” says Asher Tan, chief executive of Coinjar, the Melbourne and London-based crypto exchange.

“We think this will be driven by two trends. First, more and more banks and financial institutions will begin offering crypto to their customers, lowering barriers to entry dramatically and fuelling a new wave of retail FOMO.

“Second, the mainstreaming of NFT culture will only accelerate – particularly around play-to-earn games and pop music – bringing an entirely new market sector into the crypto sphere.

“As an overarching theme, we think the emergence of progressive regulatory regimes will drive confidence and investment in the sector, allowing responsible actors to flourish and giving large companies the green light to begin their own crypto offerings.”

“As for bear market indicators, well, if history is anything to go by, the arrival of the much-heralded Bitcoin spot ETF on the US stock exchange could be a helpful top indicator.

“Crypto does love tearing things down the moment it looks like we’ve all finally made it.”

‘Half of all Aussies under 45 will soon own crypto’

“Australia is in a crypto regulation race. The Government has recognised that in order to protect consumers, to be globally competitive, and to attract capital, there needs to be regulation,” says Adrian Przelozny, chief executive and founder of Independent Reserve. The Sydney-based crypto exchange was recently named by Blockchain Australia’s Blockie awards as the digital currency exchange of the year.

“The Bragg Report recommendations, in particular, represent a significant coming together of industry and government,” Przelozny continued.

“The Bragg recommendations, if adopted, will revolutionise the Australian crypto sector and improve consumer protection.

“We may see the introduction of a market licensing regime for digital currency exchanges, a custody or depository regime for digital assets and improvements to the digital asset taxation laws.”

On adoption:

“According to the 2021 Independent Reserve Cryptocurrency Index (IRCI) released [December 7], more than a quarter of Australians (28.8 per cent) now own or have owned crypto, signalling the coming of age for crypto as a more mainstream investment opportunity.

“In 2022 I anticipate the continued strong growth of new entrants into crypto. Women investing in crypto has doubled in the last 12 months and there’s still a lot of room for growth.

“I believe more than 50 per cent of Australians under the age of 45 will own crypto in the next 12 months. According to the IRCI survey, that number is currently 46 per cent.”

2022 ‘could be a key year’

“2021 was a remarkable year for cryptoassets, from the retail surge in Q1 with new all-time highs to market corrections and new all-time highs in Q4,” says Sydney-based eToro analyst Josh Gilbert.

“Global adoption of cryptoassets is accelerating at an extraordinary pace and we can expect this trend to continue well into 2022,”

said Gilbert pointing to a November speech by Reserve Bank payments chief Tony Richards as a sign that crypto innovations are gaining acceptance.

“They acknowledge that crypto and DeFi can revolutionise the financial industry, whilst democratising finance for the whole world, not just here in Australia.

“I think it may take crypto many years to solidify its place in the overall financial industry, but it’s already laying the foundations.

 “Meanwhile, it is anticipated that smart contracts could help to facilitate more innovative shipping and logistics processes, and merchants could have the ability to sell to customers in more countries with less friction.

 “In 2013 and 2017 we saw crypto bull markets and have now experienced this again in 2021.

“Nevertheless, I don’t think we’ve yet to see the dramatic price action we saw during these periods.

“If history is anything to go by, this could mean that we haven’t quite seen the peak for crypto yet and 2022 could be a key year.

“In the same breath, investors should remember that we may then experience a ‘crypto winter’.”


The end to four-year cycles

Last but not least, Ben Caselin, the Singapore-based head of research and strategy with AAX exchange, says that the four-year bull and bust cycles that has defined the crypto market the past eight or so years may becoming a thing of the past.

“While 2021 has seen considerable growth across different crypto markets, in part driven by institutional capital, we have not yet seen the mainstream explosion that usually drives a final bill run, marking the cycle top, this has not yet occurred.

“In 2022, we might still see such dynamics, but there are signs that indicate that the usual four-year cycle that revolves around the Bitcoin halvening may be weakening in force.

“This is good news as it would mean speculative trading on Bitcoin is on the decrease and perhaps moving more into the meme coin space.”

“With regulatory pressure building up around stablecoins, we can expect more growth around algorithmic stablecoins that do not follow the conventional custody model that we see with Tether and USDC.

“In 2022, we can also expect more developments at the level of country adoption. Emerging markets are watching El Salvador closely – there is every reason to believe that we will see more countries move towards the adoption of Bitcoin.”