What to watch out for in 2022?
The Cryptocurrency Bill and pilot of RBI’s digital currency. Industry experts say VC money will continue to flow into the sector. The developer ecosystem is expected to grow in tandem with this. Multiple international investors and homegrown funds have started to double down on the sector. This year may see startups in emerging blockchain technology and decentralised protocols receive a large chunk of investments.
Buzzy Areas
Large retail and commerce brands will try to enter the ‘metaverse’ by developing digital goods — think digital clothes — and buying digital lands to become part of the fast-evolving internet. Play-to-earn games will be a big theme in the gaming and crypto industry. Non-fungible tokens and creator tokens will be added to a creator’s arsenal to expand the pool of monetisation channels.
What about regulations?
Crypto exchanges currently follow a “Self-Regulatory Code of Conduct” that they have collectively designed as part of the Blockchain and Crypto Assets Council, which is part of the Internet and
Mobile Association of India (IAMAI). A code of conduct on advertising is also expected from the Advertising Standards Council of India to rein in audacious advertisements by various players. Cryptocurrency industry bodies have also proposed stricter Know Your Customer norms to the Reserve Bank of India, possible licensing of crypto exchanges, enabling data sharing between exchanges, and instituting a new regulator for the technically complex and dynamic industry.
Trusted by Industry Leaders
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Ritesh Agarwal
Founder & CEO, Oyo
Deepinder Goyal
Co-founder & CEO, Zomato
Will the growth continue among new investors?
Crypto exchanges, backed by serious VC money, are ready for 2022 and are investing heavily into scaling up capacity to handle the next wave of customers. Expect more sophisticated products for investors and exchanges strengthening their ‘educational’ play to attract the next set of customers.
What happened in 2021?
The crypto industry broke out of its mould as a shady industry populated by scammers and received a place in the mainstream conversation. The shift in perception came as millions of people joined crypto exchanges to dabble in crypto trading to make quick returns. The unprecedented retail investor interest nudged regulators to consider regulating the volatile asset class, and discussions are active within the government on the best way forward.
The industry got its first unicorn and then another
Crypto selling platforms attracted the bulk of capital and two of those surpassed valuations of $1
billion this year. CoinSwitch Kuber raised $260 million from Andreessen Horowitz and Coinbase Ventures, while CoinDCX raised $90 million, making them unicorns.
Number of retail investors
India has about 15-20 million retail investors who hold about Rs 6 lakh crore in crypto assets, according to Blockchain and Crypto Assets Council (BACC).
New international funds in the ecosystem
Draper Dragon, Andreessen Horowitz
Poster child from India
Polygon. Its market capitalisation stood at more than $20 billion as of December 27, according to coinmarketcap.com.
Top crypto selling platforms
- CoinSwitch Kuber: More than 14 million registered users
- WazirX: Over 10 million registered users
- CoinDCX: Over 7.5 million registered users
Total funds raised
$638 million as of December 27, according to Tracxn data. 2021 was a record setting one for risk investors, with international VCs pouring in over $500 million into cryptocurrency and blockchain startups. Indian VCs also joined the rush to take a piece of the cake. The total risk funding in domestic crypto and blockchain startups shot up by almost 17 times, compared to $37.56 million in 2020.
Most active VCs
Amesten Capital, Pantera Capital and Coinbase Ventures
