The past 2021 is the most turbulent year in the history of the crypto industry. This is not only because of the strong increase in the number of types of crypto assets and market value, but more importantly, the growth of all aspects of the crypto industry in 2021. The scale adopts and integrates new forms.
In 2021, El Salvador, a Central American country, will regulate Bitcoin into the legal tender system; non-homogeneous token NFT has become a new digital product widely accepted by traditional brands and celebrities; Facebook has changed its name to “Meta” and plans to explore encryption in many aspects Digitization; Metaverse metaverse concept breaks through the encryption circle and enters the wider Internet world and even the traditional business field.
Overseas encryption industry experts believe that 2022 may be a transitional year in the encryption field. Encrypted assets and blockchain products with relevance, practicality and good fundamentals will most attract investment markets and users. Arcane Research, a blockchain research company, some observers in the encryption industry, and KOLs have all predicted the encryption industry trends in 2022, and the five major trends reflect consensus.
Bitcoin and traditional financial indicators are getting closer
Although the increase in coronavirus cases poses a threat to the global economic recovery, both Bitcoin and the benchmark index have locked in considerable gains in 2021: Bitcoin has risen by 66%, and the S&P 500 has risen by approximately 27%. But given that Bitcoin behaves more and more like a risky asset, Arcane Research, a blockchain research company, said it will further amplify major stock market volatility.
“If the stock market continues to rise in 2022, Bitcoin may outperform the market,” the company said. “But if we see a red year in the stock market, Bitcoin may underperform.”
According to data from Arcane Research, the stock market performed well last year, but a pattern has been clear: “Fear of the broad financial market directly affects Bitcoin’s performance.” The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) is the measurement standard. A common indicator of stock market volatility expectations shown in Poole 500 Index Options. Last year, the surge of VIX was accompanied by the sell-off of Bitcoin. Arcane Research warned that market headwinds in 2022 may have an impact on Bitcoin’s short-term price trajectory.
Arcane Research also predicts that in 2022, people will see more Bitcoin mining bans in countries with weak electricity or insufficient energy supplies, “and other energy-rich jurisdictions will accept the industry.”
Ethereum will surpass Bitcoin again
Ethereum, which has long been ranked second in the ranking of encrypted assets, far exceeded Bitcoin in 2021, rising by 418%, while Bitcoin rose by 66%. “This gap is the largest since the launch of Ethereum in 2015,” Arcane said.
One of the reasons why Ethereum will continue to outperform the broader market in 2022 is the surge in NFT sales. Most encrypted assets still run on the Ethereum blockchain, which has real-world utility, and its blockchain supports smart contracts that can be used in a wide range of applications. In 2021, upgrading from Berlin to London, Ethereum has improved the network’s ability to process more transactions.
Roger is an early adopter and investor of Bitcoin and one of the five original founders of the Bitcoin Foundation. He also believes that it seems likely that Ethereum will disrupt Bitcoin in terms of market capitalization and almost all other indicators in 2022. This year, “in the next few years, many other assets may also do the same.”
Raj A Kapoor, founder of the Indian Blockchain Alliance, stated that Ethereum may surpass Bitcoin sometime in 2022 and become the most valuable cryptocurrency.
Most Meme assets will disappear
Investors have seen the popularity of Meme-type crypto tokens (memetic coins) around 2021. For example, the DogeCoin dogs currency derived from the Shiba Inu, last year soared 44,540,000%. The crypto asset SQUID, named after the popular Netflix series “Squid Game”, rose by more than 75,000% in less than a week, but quickly disappeared.
Arcane Research stated, “We cannot summarize the 2021 market without mentioning the absurd memecoin rebound in 2021,” the agency added, adding that this phenomenon will be “a historical relic of the absurd era in 2021.”
David Z. Morris, chief insight columnist at CoinDesk, believes that Meme coins are basically a casino, but they enjoy a positive feedback loop because the winner will attract major public interest and thus keep the victory rolling. On the contrary, the downward or horizontal circulation is also extremely cruel. “But by 2022, similar behaviors among newcomers to crypto assets will decrease, and there will be integration around informed investment, which means that tokens like DOGE will continue to lose momentum (it peaked in May last year), and New upside will be limited.”
David Z. Morris views Shiba Inu as “an interesting exception” because it reflects a possible demonstration of how to turn memes into real projects. “Its ShibaSwap DEX is quite interesting at least on the surface, but I can’t say with certainty whether this will enhance the project and make its meme currency feature disappear.”
Metaverse will penetrate the mainstream market
GameFi is considered a subset of Metaverse, because most game developers in the blockchain world have built an ecosystem on the chain to be more closely connected with the virtual world of Metaverse. Non-homogeneous token NFT is also a branch of Metaverse. In addition to gamers who will spend money to buy digital art, let alone they will buy game-related weapons, equipment and even virtual land.
Ishan Arora, a partner of crypto hedge fund Tykhe Block Venture, said that several themes that need attention in 2022 include games and NFTs, because by the end of 2021, crypto assets around these themes have become popular.
“In 2021, few people expect that NFT will become a killer application that can drive mainstream interest and adoption.” Sandra, CEO of the Global Blockchain Business Council, also believes that Metaverse will become a burst of curiosity in the mainstream market in 2022 .
Raj A Kapoor, founder of the Indian Blockchain Alliance, said that due to the intervention of traditional technology giants, Metavese will become a super powerful theme. “The name change of Facebook and the subsequent strong growth of encrypted games will be noteworthy events.”
“Look at the list of major media companies, sports leagues or content creators participating in digital assets at the beginning and end of the year,” Wu of Ava Labs believes that more traditional brand companies will enter the NFT field in 2022.
DeFi innovative products will promote the evolution of public chain networks
“By 2022, DeFi will still be a major event. We only see the tip of the iceberg.” Nils Gregersen, founder and CTO of Paycer UG in Hamburg, Germany, believes that there are many new product launches in the DeFi field that we cannot imagine today. .
Chris Kalani, Chief Product Officer of Phantom Wallet, is even more looking forward to DeFi unlocking new cases of games and payments. “The speed-up and cost reduction of the blockchain network will open the door to us that we did not see in the first wave of DeFi boom, because Layer The development of 1 and Layer 2 will push developers to conduct more experiments. One area we have seen is the emergence of decentralized autonomous organizations (DAOs).”
CoinDesk chief insight columnist David Z. Morris bluntly said that one of the really bullish facts he saw this year is that users’ interest in real applications across multiple blockchains is scattered, “For example, in the field of NFT and DeFi, we not only I saw Solana, and I also saw the large-scale adoption of Tezos and other blockchains.” He said that there are good reasons to believe that in the long run, it is more likely to form 2 or 3 dominant smart contract chains. , Instead of 5 or 6, “Next year will expand the diversity of people’s actual use of platforms, but there will be real competition and eventually reintegration.”
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