Ah! What a time to write this one eh? I know I am a little late to the party for a post like this. But hey, for those of you who predicted a magical 2022 with all cryptos going to the moon, we’ve seen bloodshed in the past couple of days now. So, this ideally is the moment to take this with a pinch of salt and add some rationality to your vision of cryptoverse. As a result, in this blogpost, I am going to cover some general trends which will hold the centerstage. We’ll also cover some predictions along the way. Let’s begin: Crypto trends of 2022.
The Red Weekend:
Before we dive deeper into the future, a quick glimpse of what’s happening in the marketing over this weekend. In that past 4 days, BTC has dipped more than 25% and the entire market has lost about $1T in valuation. Crazy right? Key reasons for this?
- Russia is likely to take the China route when it comes to cryptocurrency, and implement a total ban. Since a lot of mining is dependent on cold weathers of Russia, this is considered as a bad news.
- US fed has indicated that interest rates are likely to be increased in this year to a tune of 3x. Allow me to explain this:
- Whenever there is an economic slow down (like Covid), governments print more money to pump into the system. Borrowing rates are slashed down and banks are encouraged to lend more.
- Expectation is that this will make corporates borrow more, produce more, sell more and hence economy will get back on it’s feet.
- Flip side? Inflation. If there’s so much money floating around, easily accessible, the price of goods is likely to go up. Why? Because there are now more buyers for same set of items. (production has not increased, you see)
- So when government tames inflation by increasing back the rates, it is often bad news for money markets. Why? Because the listed companies aren’t getting access to the easy capital as compared to earlier situation.
So What’s Next?
Instead of focusing on the money aspect of crypto and trading stuff, let’s zoom out today and see if there is a general trend which can be monetized. Now that reality has hit each of us real hard, I think it’s time to talk about the narratives doing the rounds, in detail. So let’s start with the biggest ones of 2021 and take it from there:
A. NFTs:
People managed to generate life changing wealth using NFTs in 2021. From generative art to digital art pieces, everything was selling.
In 2022, my prediction is that PFP (profile picture) and flex related projects will mellow down. There is just too much hype and it would fade away soon. Even more so, after the crash.
Does that mean it’s an end for NFTs? Hell no! NFTs are going to be a way of living in 5 years from now. Everything would be tied to this. As a result, projects that are offering something tangible (utility based) will flourish.
Here’s a quick example of the same: My wife recently baked a Bitcoin themed cake for my birthday. I put the photo of that cake as NFT on OpenSea. The holder of the NFT gets four cakes for free in 2022.
Coming to some more popular examples like Lakshmi NFT, where the holder is entitled to a fixed interest rate per month varying between 18% to 108%.
Some of the key NFT projects you can keep an eye on: Trimurti NFTs by Zionverse, SolPunks.
B. Metaverse:
Another domain that ripped all possible barriers of rationality in 2021 was Metaverse. Why? Mainly because one of the world’s largest web2 company, Facebook showed interest in this space by rebranding themselves to Meta. As a result, all decentralized counterparts of Metaverse immediately hit a 4x soon after the news.
I expect this to grow even bigger in 2022. Why? Because even more brands would now jump in. Not necessarily because they believe in the growth of this space, but because it’s a legit marketing opportunity. Especially when it comes to targeting the Millennial and GenZ customers.
Just a couple of days ago, Microsoft acquired Activision, a gaming company to build it’s own Metaverse. This was largest acquisition in the history worth $68bn.
I expect a lot more of this happening. Either companies would start building their own version of Metaverse or joining bigger Metaverses.
My bets are on the projects like Sandbox, Decentraland and Enjin. The land sales being a key part of these investment.
C. Web3
Web3 is the bigger umbrella of the cryptoverse. As crypto markets go mainstream, people will tend to move away from speculation and start exploring the actual dApps before investing in one. Apart from that privacy concerns will continue to drive people to apps developed on web3 business models.
If you are unsure how web3 helps people in ownership and privacy of their data, here’s a post I wrote on Brave Browser and Chingari. These are the perfect examples of how business models are tweaked to ensure that decentralization and customer privacy is of utmost importance while maintaining the profitability.
In 2022, following projects are like to create ripples when it comes to web3:
- Arweave (AR)
- Audius (AUDIO)
- Basic Attention Token (BAT)
- Bittorent (BTTC)
- Filecoin (FIL)
- The Graph (GRT)
- Helium (HNT)
- Chainlink (LINK)
- Livepeer (LPT)
- Siacoin (SC)
- Theta (THETA)
D. DAOs:
DAOs or decentralized autonomous organizations are the newest narrative of cryptoverse. Think of a DAO like a group of people on the internet. Say, a WhatsApp group but with a pool of funds. All the members get to decide where the funds are allocated.
Each member is working on their core competency with a common goal of DAOs betterment. They grow as the DAO grows. How does it work you ask? Well, in most cases, there is token called the governance token. Greater the number of tokens you hold, higher is your voting power in the DAOs decisions.
Anyone can raise a proposal and people vote on it to decide the DAOs future.
I believe that DAOs will soon become a narrative of interest for the entire industry in 2022. People will start creating and joining DAOs real soon.
Top projects that are working as DAOs are Uniswap, Aave, MakerDAO, CurveDAO etc.
E. DeFi
Decentralized Finance has always been the dark horse of crypto industry. I feel that DeFi is slightly more complicated and hence boring for a lot of people. Non sexy part of crypto industry, if I may. Which is why, it often doesn’t get hyped as much as NFTs and Metaverse projects do.
Don’t believe me? TVL (total value locked) of DeFi protocols moved from 18bn in December 2020 moved to 250bn in December 2021. But you won’t find that in headlines. It’s not as raunchy as an ape jpeg selling for a million dollar.
My prediction is that DeFi would show exponential growth in 2022 as well. My rationale behind this is that a large chunk of people got exposed to crypto for the first time in 2021. These people would now exit centralized exchanges and venture deeper into DeFi space.
Conclusion:
In a nutshell, short term crashes are inevitable. But if you keep a long enough horizon and invest for a period of 4-5 years, crypto industry will reward your patience. I don’t know about individual projects, but blue chips like BTC, ETH, SOL etc. are here to stay. So is blockchain and web3 revolution. Think big and stay calm.
And most importantly, keep learning. Got questions?
Got questions? Want to take it to the next level? Reach out to me using your preferred platform from the links below
Until next time..
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Btw, if you are a seasoned trader or just testing the waters with derivatives, here’s an exchange specifically meant for that. Head over to MCS using this link. Still not convinced? Join the vibrant community that is talking about MCS on Telegram, here.
Btw, if you are a seasoned trader or just testing the waters with derivatives, here’s an exchange specifically meant for that. Head over to MCS using this link. Still not convinced? Join the vibrant community that is talking about MCS on Telegram, here.
