New Year 2022 - Crypto Predictions and Narratives
After the holiday break and some traveling I want to start the new year with an outlook on the upcoming year of 2022. The past year of 2021 was a very crazy year in the crypto market. We saw the bull market developing, a few crack downs and adoptions, the NFT hype and other very interesting things. But now everybody is wondering whether this development will continue in 2022 or will we see stagnation bigger crashes, a bear market or even a continuation of the bull market? It seems like everything is possible and everybody is waiting for the next big thing. Messari tried to make some predictions for 2022 and in this article we will take a look at some of them. In case you don’t know, Messari is a crypto analyst company that takes an informal approach. The predictions that we will be covering can also be read in the following report:
With this out of the way, lets look at some predictions that they come up with.
In one of the first parts Messari covers the top narratives that are going to happen in 2022 and with them some investment themes and thesis. They talk about the collapse of the institutional trust and that almost nobody trust their governments anymore. With this being said, they also mention that things will get worse before they get better. Another narrative is that Web 3.0 is inevitable. It has everything it needs to push towards mainstream adoption and those things are: advanced technology and talented people. Furthermore, they are talking about Bridges NFTs and DAOs. Here, the main consensus is that while certain collections are in a bubble, the whole NFT space is about to explode. If the problem of the absence of scaling solutions will get solved the whole space could see a big push. One of the most interesting topics in this category is the narrative of decoupling cryptos. Messari predicts that more and more categories and niches of crypto projects will emerge which will lead to an independence of BTC. Speaking about BTC, the next narrative is that even more money will flow into the crypto space which will also lead to a BTC price of 100k in early to mid 2022. Last but not least, Messari says that a bear market is pretty much inevitable and that it will happen because of further regulations and other factors such as ESG. According to Messari it is not favorable to try to rime the top and take profits along the way because the drop could be brutal.
The next section in this interesting report are some Bitcoin predictions. Here, I will again summarize some of the more interesting points. Firstly, Messari suggests that there will be no flippening happening in 2022. One of the main reasons could be a crypto bear market. Furthermore, a Spot ETF could be on the horizon which could be very good news for BTC in general. Another very risky prediction is that China will fall in terms of crypto space which could be very interesting because they will allow BTC Mining again which could also have impact on the next prediction. There will be a clean energy stimulus thanks to BTC mining. Because there is already a big ESG concern towards proof of work mechanisms a lot of miners will have the incentive to switch to a more green power grid which then could lead to more innovations in the renewable energy sector. Speaking about consensus mechanisms, the next point is that Proof of Work and Proof of Stake will coexist in the future. Meanwhile Proof of Work will remain the most fair and secure of those two. Last but not least, Messari mentions that the development of BTC will continue to grow and that another country in South America could adopt BTC with the help of the Lightning network in 2022. In my opinion most of those points are very bullish towards Bitcoin and it would be a pleasure to see all of them playing out through out of 2022.
Next up are a few Ethereum predictions which I will also summarize in this article. It starts of with ETH 2.0. This event will supercharge institutional investment into Ethereum, partially because of Proof of Stake compliance with ESG. Furthermore, miners will not rebel against this transition because the pools that did were mainly in China and were shut down. Once the merge is complete, liquid staking will allow people staking Ethereum to use it in DeFi protocols. Another very interesting point was that ETH Virtual Machine will continue to be the most popular smart contract engine. At the same time, Solana will cement its place as the top competitor to Ethereum primarily because of its speed but partially because it is not trying to copy ETH like many other smart contract crypto projects. Additionally, Cosmos will become very important as it becomes clear that interoperability between blockchains is the future for crypto currency. Especially the last point is very nice to read as I always believed in a very diverse crypto space.
Possible Regulatory Predictions
We continue this report by looking at possible future regulatory predictions. The first one being that reasonable regulations should be addressed. Stuff like exchange risks, stable coin risks, banking integration risks, anti money laundering risks, tax evasion risks and security fraud risks are the main topics to be addressed. Furthermore, there will be different regulatory bodies in the US that will continue to have a negative attitude towards the crypto space. But there will also emerge some government groups that will advocate FOR crypto.
NFT & DeFi Predictions
One of the most interesting fields in the crypto space right now are the NFT and DeFi niches. Starting of with NFTs, most of them will go to zero but the NFT technology will impact every sector of the economy. The NFT infrastructure like blockchains and market places will outperform the expected value. Additionally to that, fan tokens will become more popular and top gaming studios will announce their own P2E Crypto games. Furthermore, the use of NFTs in DeFi will increase as well as the fractionalization of NFTs. OpenSea will beat all of the centralized market places and the crypto metaverse will beat the big tech metaverses in the short run. Unfortunately, the medium term will be won by the big techs because of their funding.
As for the DeFi predictions: Tether will not get tackled by the regulators and will continue to be one of the primary bridges to crypto. Furthermore, Terras UST Stable Coin will become one of the most popular decentralized Stable Coins and algorithmic Stable Coins will unfortunately become useless. Uniswap V3 will continue to dominate trough out 2022 and new kinds of DeFi protocols will be deployed. Here, the most successful will be those which will be able to work on multiple blockchains. One of the most interesting points is, that centralized decentralized finance will become more popular to the point that token holders of DeFi protocols like Aave will push them to pass proposals which make them more regulated. This would be also a risk to all Proof of Stake crypto projects out there.
I want to close this article with some final thoughts. This report is way longer than my summary could cover it so I encourage everybody who has the time to take a look at the report. Secondly, I think that a lot of things were portrayed very optimistic but that’s just my opinion as I am more of a glass half empty guy. Nevertheless, I would be more than happy if all of the optimistic predictions will come true. With that being said, I hope you all had a great start into the new year and I am very interested to see what you think about the 2022 predictions.
Published by ga38jem on
On 3rd January 2022
Posted Using LeoFinance Beta