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What to look out for in Cryptocurrency in 2022?

Cryptocurrencies, Metaverse

Written by:

Aik Keong

Hey everyone, I’m Aik Keong (AK) and I help new aspiring cryptocurrency investors to get started safely via our free cryptocurrency masterclasses. Last year was an interesting year of growth for cryptocurrency. Today, I’ll share my thoughts on what to expect in the year 2022.

Here are five predictions that I think, would be very exciting for the year ahead.

1) Bitcoin (BTC) to $100k, Ethereum (ETH) to $10k

Bitcoin and Ethereum did not hit their expected price range of $100k and $10k respectively in 2021. That did dampen many investors’ hopes as we saw a drop in the top two coins’ market cap coming to the end of 2021.

The dump was expected as there were many external pressures in the entire financial world. Even though both coins did not meet their expected targets, they performed impressively well in the year 2021. BTC made a nice gain of 57% and ETH at a whopping 400%!

So, what can we expect in the year 2022 for the “Big Two”?

BTC’s Taproot Upgrade

BTC completed their long-awaited upgrade, Taproot and now allows the BTC network to run Smart Contracts!

It took away to finally happen but its never too late. We might start to see developers moving to the BTC network to start building apps. It would be an attractive position to become one of the first apps to be developed on the BTC network.

More BTC ETFs in the pipeline

Not to mention, there are more BTC ETFs waiting for approval by the US SEC. Once any of those in queue are approved, the floodgates of fresh funds will be further opened for investors to buy up BTC in troves. 

ETH’s upgrades

ETH has completed a slew of upgrades and the most significant would be the burning of ETH, reducing the supply of ETH for the first time in history.

Although it’s not in full swing yet but we’re getting a taste of what’s going to happen. When the merge is fully complete, new ETH supply will drop by 90% from 5.4 million to 0.5 million a year! This works hand in hand with one of my investment theses where when supply falls, demand increases and value will accrue through time.

More network upgrades are slowly being released with the most recent being Beacon Chain. It is the foundational component for a more secure, scalable and sustainable ETH network. 

2) Non-fungible Tokens (NFT) – The Surprise Crypto Catalyst

The world was introduced to the word NFT (read: “What are NFTs?“) when an NFT was sold for $69 million in March 2021.

After that, more shocking news of Etherocks selling for $1.3mil, VISA buying a Cryptopunk for $150,000 and JJ Lin being gifted a Bored Apes Yacht Club(BAYC) which is valued at around 70ETH at the point of writing.

Most of these NFTs minted or first created at a low price, an example would be BAYC. Mint price is 0.08ETH, making it an 875x gain! What’s the big deal about these images that are worth that much anyway?

NFTs are a category in the entire crypto market that have exploded beyond believe in 2021.

Unlike trying to understand how 1 crypto differs from all the other 12,000 coins, NFTs can be easily viewed, shared and certified on the blockchain. Authenticity of ownership can be tracked to who has access to the wallet.

As such, many developers are changing the way NFTs are should be regarded. Yes, they are images but they can be more than just images. NFTs can now grant private access to product launches, private concerts of major artistes like Justin Bieber or BTS. You could also score a spot on the whitelist for more NFT private launches even before it’s publicly launched. The use cases of NFTs have evolved very quickly while the rest of the world are still learning about it.

The ability to satisfy instant gratification of the younger generation coupled with an ever-expanding range of utility suggests that NFTs could be the next thing that new investors will be HODLing after buying their first crypto.

We would be seeing more NFT launches in 2022, many would fail but only the very good ones with a dedicated developer team will last through the test of time.

We have not even touched on the Metaverse and what it could bring about in the near future with big brands like Adidas and Nike joining the fray, offering virtual merchandise for user’s alter egos of the future. Hoverboard not ready in the real world? Come over to the Metaverse, get your hands on one and traverse around in style!

3) Welcome to the Metaverse

Major tech companies are slowly entering the space of the metaverse with Sandbox (SAND) and Decentraland (LAND) being the first to launch in the past year or earlier. We had an inkling that the metaverse is going to be massive when Facebook announced that it’ll be rebranding itself as “Meta”.

Many developer-focused companies are also working their way to provide the tools and services to allow companies to bring their products and services onto the metaverse. One possibility is the ability to enter a shop in the metaverse, try out the clothes and have them all delivered the physically to your home!

This is where the gap between online payment and crypto payments comes into play.

The first wave of customers who make such purchases will probably be paying for these merchandise in crypto. ETH could be one of the first few cryptos used for such transactions. As such, retailers would have to start accepting cryptos in the near future so as to support this avenue of sales.

This new stream of sales will grow as the next generation of spenders will indefinitely be growing in numbers, similar to how online shopping has exploded exponentially since the early 2000s. 

4) DeFi 2.0

Decentralised Finance (DeFi) had an amazing run in the year 2020 but lost steam in 2021 as BTC, ETH, BNB and the other ecosystem coins started to attract more new investors.

During this period, many DeFi protocols came up with fresh ideas and new improvements. However, even with these upgrades, it didn’t bring in enough attention as most investors were looking for the next new start up crypto for multi-bagger or 100x gains. 150-300% APY could no longer attract them. 

After a slow start in 2021, we saw an emergence of platforms that brought a fresh idea of what DeFi 2.0 would look like in late 2021.

Liquidity management coins such as Tokemak (TOKE) and Olympus (OHM) emerge with great fanfare although their full potential have not been achieved yet. Lending protocols such as Aave (AAVE) could be replaced by Silo Finance (SILO) which offers improved lending platform with better safeguards.

The DeFi sector is slowly brewing and consolidating their distributed efforts. I believe DeFi 2.0 will definitely make some noise in the crypto market in 2022.

5) Rise of the DAOs

In November 2021, a decentralized autonomous organisation (DAO) called “ConstitutionDAO” tried to buy a rare copy of the U.S. Constitution. What started as an idea mooted by a couple of friends grew to a community of more than 8000 interested users, raising $40 million+ to bid for a copy of the Constitution. It was not a good ending though as they lost the bid. The document ended up being sold for $43.2 million to an unknown bidder.

But the story doesn’t end there.

Another DAO had successfully won the bid for another iconic item. The one-of-a-kind album titled Once Upon a Time in Shaolin from New York hip-hop legends Wu-Tang Clan was sold to PleasrDAO. PleasrDAO describes itself as “a collective of DeFi leaders, early NFT collectors and digital artists,” adding that “the DAO has evolved and elevated its mission to collect digital art that represents and funds important ideas, movements and causes that have been memorialized on-chain as NFTs.”

One of the representatives of the DAO, PleasrDAO Chief Pleasing Officer Jamis Johnson, announced the winning bid of $4 million and how they will manage the album’s duplication, distribution or public exhibition.

These key events showed many in the world the power of a collective effort in the crypto world. Movements coordinating monetary efforts can be arranged in a DAO in a easier and faster manner.

Since everyone who contributes has a say based on the percentage they are holding, the more you contribute, the higher your stake in the DAO, the greater weightage you have in the final decision. This could form a new way to organising non-governmental organisations (NGOs) efforts in the future.

On top of that, since all monetary efforts are recorded on the blockchain, it is transparent for all to see and anyone that doesn’t agree with the direction, can pull their funds out anytime.

One possible move I could see happening in 2022 is a DAO collecting some of the most expensive NFTs out there. Imagine it as an ETF for NFTs. Investors can contribute their funds, vote on what NFTs to buy or sell, and decide on how these rewards should be distributed back to the contributors. Everything is transparent and immutable, as all things should be on the blockchain.

With that, those are the five things to look out for in crypto for the coming year. These are exciting times and I can’t wait for what is going to happen in the crypto world!

P.S. 2021 showed us a small glimpse of the vast possibilities that crypto could bring and 2022 will be an exciting year. But if you’re new to all these, you should be FOMO-ing. Instead, get your foundations right so that you can capture some good profits in the markets safely. I’ll be sharing the key fundamentals for you to get started, join me live at the free cryptocurrency masterclass.

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