HomeCoinsBitcoinThree Bold Predictions For Crypto Going Into 2022

Three Bold Predictions For Crypto Going Into 2022

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Crypto Moves Fast, And Trends Even Faster.

2021 was the year of NFT’s, Play-To-Earn, Metaverse, and Meme Coins. Overlaying all of those trends was the obvious focus on Layer-1’s, which underpin the whole gambit. No one has a crystal ball, but some things are more obvious than others when you study and write about crypto for a living. Below are my 3 bold predictions for crypto going into 2022.

3. Meme Coins Die a Quick Death

You May Not Even Hear “Meme Coin” in 2022 Except When Referencing 2021.

I know, this is low-hanging fruit, but still. The prediction is that there will never be a “new Shib” or “new Doge.” As we have seen this year, there was not a single meme coin out of the thousands created besides those two that had any staying power whatsoever. Remarkably, Gemini listed Dogelon Mars recently, which is the only anomaly. I see Dogelon Mars failing spectacularly.

The hype behind meme coins will die out; it already has. Even Doge and Shib are at risk. I predict both fall out of the top 25 by the Summer of 2022 and could fall far lower. The phenomena behind Doge and Shib were the FOMO and media hype combined with the widespread new retail awareness of crypto as a whole. That scenario is impossible to replicate.

The toothpaste is out of the tube, and that hype cannot be re-sparked unless the meme coins provide value and fundamentals, which would make them not meme coins. You will see fewer and fewer meme coins created, and the whole concept will fall victim to the end that every fad faces; that is the fact that people move on to what is next, not what was. Memes are by definition a function of the present tense anyways, right?

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dogecoin google trends

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2. Bitcoin DeFi Surges

Smart Contracts on Bitcoin Will See Large Adoption

This is not even because of the Taproot upgrade that makes very limited programmability possible on Bitcoin, but because of the other novel solutions that have been plugging away for quite some time. Unlocking the trillion-dollar market cap of Bitcoin and making it a productive asset will be a narrative and idea the maxis will be forced to embrace as Layer-1’s continue to eat into Bitcoin dominance. Also, it just makes plain sense.

Stacks and RSK (RootStock) are the leading smart contract solutions for Bitcoin. They will succeed more than Lightning and Liquid in 2022, which are just for payments, not DeFi or expressive smart contracts. RSK, a Bitcoin sidechain (without their own token) already has a fully shipped money market for Bitcoin called Sovryn. This has been live since only June and quietly is seeing a lot of adoption and TVL, as seen below.

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credit: defillama

You hold your BTC keys, there is no gas token, and you can borrow against your Bitcoin on a completely non-custodial platform. It is fully audited and isn’t grifting via Bitcoin affinity. DeFi for Bitcoin, lending and borrowing markets that are Bitcoin native, use BTC as gas, aren’t IOU’s like wrapped BTC, and have BTC backed stables are a win-win and set to blow up in 2022. The anti-Bitcoin DeFi narrative will change quickly.

Keep an eye on RSK ($rBTC), Stacks ($STX), Arkadiko ($DIKO), and Sovryn ($SOV).

1. Ethereum DeFi TVL Gets REKT

ETH 2.0 is Unlikely This Year, Other Chains Will Eat Up Market Share

I would wager that ETH 2.0 will not ship in ’22. With that in mind, their ever-decreasing majority of DeFi TVL will hastily decline. All of DeFi used to exist on Ethereum, so it is no surprise they still have 62% of all DeFi TVL. However, just in 2021 alone, they went from having 96% of DeFI TVL to 62% as chains like BSC, SOL, AVAX, and TERRA swiftly cut into their market share. I predict by 2023 they will have less than 30% of all DeFi TVL. 

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credit: defillama

Even if 2.0 ships, there are at least ~5 other Layer-1’s which arguably have, with the same security, the same or better capabilities than Eth 2.0. Secondly, Layer-2 solutions are actually eating away at Ethereum’s market share. Sure, they have the ETH affinity, but as Tascha Labs pointed out on Twitter, ETH is trading their exponential growth for linear growth. L2’s, sidechains, and the like are actually competitors to ETH.

For these reasons, and the clear fact that other Layer-1’s are building out very robust ecosystems outside of any EVM compatibility or even any real bridging, (see Algorand TVL growth) Ethereum’s DeFi dominance will shrink drastically in 2022. I don’t think they will be market cap flipped in 2022, not yet. This is especially because ETH adoption by institutions continues. However, I wouldn’t be shocked if ETH gets flipped in DeFI via TVL market share.

In conclusion, as a whole, I see 2022 for crypto being a “coming down to earth” scenario. Rationality will trump mania, fundamentals will prevail over hype, and decentralization will be more heavily weighed by investors. All that said, my little sneaky prediction for 2022 is that there will not be a harsh bear market, nor a mega supercycle.

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