2022 Q1 Crypto Industry Report

The report provides a phased review of the development of the crypto industry in the first quarter of this year from the dimensions of the crypto industry's macro market overview, the development status of mainstream public chains, and the latest developments in the industry's popular sectors.

OKLink quarterly report quick read (part)

Quarterly Report

• In Q1 2022, Crypto was affected by two external factors: monetary policy and geopolitics . The increase in uncertainty risks caused Bitcoin to bottom out twice.

• Despite the price drop, it does not stop institutions and public companies from continuing to increase their holdings of Bitcoin.

• 2022 is a key year for Ethereum's transition to PoS, and the number of stakes in the ETH 2.0 deposit contract has exceeded 10 million .

• Non-EVM public chains are competing to launch EVM-compatible versions, accelerating the prosperity of the multi-chain ecosystem, and Ethereum's TVL dominance continues to decline .

Monetary policy and geopolitical factors have a significant impact

The report pointed out at the beginning that monetary policy and geopolitical factors were the two external factors that had a greater impact on the crypto industry in the first quarter of 2022.

Since the end of 2021, the Federal Reserve and central banks of various countries have launched a series of actions such as interest rate hikes and balance sheet adjustments. The tight monetary policies of major economies have brought certain bearish sentiment to the crypto market.

In addition, the Russian-Ukrainian military conflict that broke out at the beginning of the year and a series of sanctions imposed by NATO countries on Russia have led to a surge in the prices of global agricultural products and energy supply chain products, increased uncertainty risks in traditional financial and commodity markets, and further transmitted negative sentiment to the crypto market. As the Fed's interest rate hike has become a foregone conclusion, the two sides of the Russian-Ukrainian conflict are trying to return to negotiations, and the related negative sentiment has gradually been digested. Therefore, the crypto market began to stabilize and rebound after two rounds of bottoming out in the first quarter.

It is also worth noting that despite the overall pessimistic market sentiment in the first quarter, overseas institutions and listed companies are still optimistic about the long-term value of mainstream crypto assets, and such assets have become an important asset component in the balance sheets of many overseas companies involved in the crypto industry.

OKLink data shows that MicroStrategy holds the largest amount of Bitcoin among overseas listed companies. The company began hoarding Bitcoin in August 2020. As of the end of the first quarter of 2022, it held a total of 129,218 BTC, worth US$5.8 billion. This even exceeds MicroStrategy's market value and is three times the holdings of the second-ranked Tesla.

Data source: OKLink

Welcome to the era of Ethereum 2.0 and multi-chain prosperity

Ethereum, the public chain with the most active ecology, is moving towards the 2.0 stage in order to completely solve the congestion on the chain and improve the scalability of the blockchain. The most core change is the transformation from the PoW algorithm to the PoS algorithm. 2022 is the year when Ethereum plans to transform to PoS. This new upgrade means that Ethereum has taken a key step towards the world-class financial settlement layer and DApp underlying architecture.

Google Trends data shows that the search volume for "Ethereum Merge" hit a record high in the first quarter. In addition, the search volume for keywords such as "Proof of Stake (PoS)" and "Ethereum 2.0 Release Date" also increased significantly. It can be seen that ETH 2.0 (now renamed the consensus layer), which brings fundamental changes to the Ethereum network, is really touching the market.

Staking ETH is a key step in Ethereum's evolution to the 2.0 stage. OKLink data shows that the number of ETH 2.0 deposit contract addresses staked has exceeded 10 million. As of March 31, Ethereum 2.0 has received a total of 10,989,186 ETH staked, accounting for 9.30% of Ethereum's circulation.

We may soon see an Ethereum that has been greatly improved in terms of scalability, security, and sustainability.

Data source: OKLink

However, to be realistic, Ethereum's current high gas fees and congested network have made some low-cost public chains (such as Polygon, Fantom, etc.) running on Ethereum EVM (the core underlying component of the Ethereum ecosystem) very popular.

Non-EVM public chains that once emerged as Ethereum challengers are also competing to launch EVM-compatible versions: such as Moonbeam added by the Polkadot public chain in January this year; Aurora launched by the Near public chain in May last year; Evmos, the EVM network of the Cosmos public chain, which may be postponed to April this year, and the Neon Labs project of the Solana public chain.

It is worth affirming that, on the one hand, non-EVM public chains provide new entry points for users and assets by adding EVM compatibility; on the other hand, by integrating widely accepted standards, they will bring more composability to the global blockchain ecosystem and accelerate the prosperity of the multi-chain era.

With the rapid development of the global blockchain and encryption industry, the analysis and processing of large amounts of diverse on-chain data can provide a barometer for judging the development trend of the industry. In this regard, OKLink has launched a series of data reports reflecting the development of the blockchain and encryption industry based on its self-developed technology platform and rich experience in on-chain data processing and analysis, and will continue to provide support for industrial development.