Well, wasn’t 2021 sort of a moon launch? I think so. It hit all-time highs despite all the “legends” saying it’s a worthless seashell for tech dorks. Wrong! Hey, it’s not $68,000, but it’ll get there again.
“Bitcoin will reach at least $200,000 by 2025,” says Paycer UG founder & CTO Nils Gregersen in Hamburg, Germany. “But I am pretty sure we will see it fall to around $20,000 before hand.”
Okay, no panicking. I’ll buy it.
What about the rest of the cryptocurrency space? There’s more to this market today than Bitcoin. Cryptocurrency investing is the new stock market. Everybody knows that.
This year was a very interesting one for crypto. We saw trends coming and going very fast — with coins hyped up by influencers like Elon Musk — who gave Dogecoin a lift for a short time before it returned to being a dud coin.
“There is a lot of pump in the market at the moment,” says Gregersen. “I think in 2022 we are going to see a little cooldown in the market. Only the stronger projects will survive. For the memecoins and other shady projects, I think the air gets a little thinner for them,” he says, adding that regulations will have an impact on DeFi cryptocurrencies, within varying degrees of positives and negatives.
“DeFi will still be a thing in 2022. We have only seen the tip of the iceberg in terms of DeFi,” says Gregersen. “There are many new products to come that we can’t even imagine today.”
Some DeFi trends expected next year: Decentralized Autonomous Organizations (DAO) that offer unregulated, decentralized finance and a new regulated centralized- decentralized finance. Call it the yin and yang of DeFi, I guess. CeDeFi will offer less complex financial services based on DeFi but will hold hands with the regulators of financial markets and banking, in general. This might be the type of DeFi that Jim Cramer of Mad Money can get behind.
Ava Labs president John Wu also predicts DeFi will have a good 2022.
But he seems to like the GameFi space even more.
“DeFi will continue to lead in terms of total value in the ecosystem, but blockchain gaming will introduce more people to crypto because the learning and adoption curves in gaming are notably smaller than that of DeFi,” he says.
Yeah, I’m still playing video games on an X Box One. I don’t know about blockchain games. I have never stared into the eyes of any blockchain yet. I’ll have to do that this year.
“Gaming growth is outpacing new DeFi activity. Just wait until major developers and studios get involved,” Wu says.
GameFi is considered a subset of the metaverse as most game developers in the blockchain world are building their ecosystem to be more linked to the virtual world. Non-fungible tokens (NFT) are also an offshoot here — because diehard gamers will spend money for digital art, let alone weapons and other gear (or fake land) associated with a game.
The metaverse is in its infancy. So this gives crypto investors a chance to get in on the ground floor of some of the newcomers. I own Decentraland (MANA) as my metaverse play.
“Getting aboard the metaverse train today with all the connections to other aspects of blockchain evolution will be synonymous to getting aboard the Bitcoin train in its earliest days,” says Sven Wenzel, co-founder of Castello Coin, which operates in the digital art space. “An early investment in a metaverse token can amount to so much more in the longer term,” he says in comparing metaverse plays with the likes of Bitcoin.
Castello Coin and Decentraland all run on the Ethereum blockchain. It’s still the No. 2 cryptocurrency investment after Bitcoin. How will Ethereum look in 2022?
“I would invest in Ethereum. I would invest $200 every month in Ethereum,” says Gregersen.
Overall, market participants expect more people opening accounts with exchanges. That’s a long term bullish signal for cryptocurrencies.
I predict some of the more old school platforms (think E*Trade) will allow for investment in at least Bitcoin and Ethereum next year. That should get more people involved, especially those who can’t be bothered opening up a Gemini account, for instance.
The resilience of cryptocurrencies is expected to be a highlight again this coming year. We all have witnessed how our investments can snap back rather quickly from a 10% or 20% loss.
In the past, this would have triggered a sustained downturn and ‘crypto winter’, but better risk management on the professional investor side means the market just has a snow day instead. People will be buying the dips in 2022.
I know I will. After a 23 day battle with Covid, I’m ready to put some money to work in my Coinbase account again. I’ll probably load up on some Bitcoin. After these interviews, I might have to check in on MANA.
Besides investing ideas, Wu from Ava Labs thinks more traditional brand name corporations will enter the space in 2022.
“Look at the list of major media companies, sports leagues or content creators participating in digital assets at the start of the year versus the end of it,” he says. Deloitte and Mastercard recently linked up with Ava Labs to explore their Avalanche blockchain and its smart-contract enabled applications.
This year was a true zero-to-60 growth in new blockchain protocols like Solana (SOL) and Polkadot (DOT). Many Fortune 500 companies who used this year to explore what NFTs and digital assets can do for them will be two feet in, in 12 months’ time, Wu predicts.
“They’ve seen their peers succeed and so the risk of failure is low enough to make a move,” he says.
If you watched the World Series, you saw the FTX crypto exchange logo on the jerseys of the umpires. Yes, you can buy and sell NFTs on FTX, like the currently priced $615 Stephen Curry NFT: The 2974 Collection.
So 2021 was the year of NFTs, for sure. What will 2022 be the year of, if you had to pick one?
More new blockchain projects, especially for businesses, says Wu.
“I think you will see enterprise blockchain pilots move into the live stages a lot quicker than people expect,” he says.
Sorry, haters, the world will still be investing in digital assets in 2022. To steal an old adage from the world of Wall Street: the trend is your friend.