A lot of people were expecting the current crypto market cycle to finish at some point in late 2021. While Bitcoin did reach a new all-time high of almost 70k in early November, it also pulled back considerably since then. A lot of indicators are suggesting that we’re nowhere near the end of the cycle and considering that the crypto market overall slowed down considerably towards the end of the year, I think we will likely see this cycle extending into the second half of 2022 and possibly even early 2023.
Considering that we may still have good 12 months or more of this bull run, what trends we are likely to see in the crypto space in 2022?
I think that first of all – we should expect some surprises, as it’s often the case in the crypto space or any other new and rapidly developing technology. But as we cannot prepare for the unexpected, let’s see what we can expect to happen.
I think these are the two keywords for crypto and NFTs in 2022. We’ve started already seeing this trend in NFTs – we moved from 10,000 generative images to utility such as generating tokens, ‘baby’ version of the genesis collection, access to alpha communities, games or gamification, etc. A lot of people who are investing in crypto now are investing in whatever can give them a quick gain. I expect this to start shifting towards investing in projects (games, DeFi etc.) that people actually use themselves and it’s easier for them to see the value in those projects. This in turn will lead to decoupling from bitcoin and the ‘main’ crypto market – again, we've already started seeing this with gaming cryptos and NFTs.
This one is pretty obvious ;-) It’s a continuation of a theme that dominated the crypto space in the second half of 2021. Crypto gaming and the metaverse will remain one of the main trends, if not THE main trend, for the next few years and will likely be one of the key elements in mass adoption of crypto.
A lot of projects, which had their IGO in 2021 are aiming to release their games in 2022 so we will see which projects will make it’ and generate huge profits for their investors and which ones will fail or maybe need more time to become successful.
I put it in quotation marks as it won’t be real mass adoption – NFT space at the moment on has approximately 350,000 active users. Even if this number is not very accurate, we’re looking at a fraction of 1% of the population of the planet, so we won’t reach mass adoption for quite a while but nonetheless, I think NFTs will absolutely explode in 2022. Let’s just look at a few headlines:
The list goes on. I think it’s easy to see a trend here. I think we will see more NFTs with utility, more big brands entering this space and more interest in ‘traditional’ art (such as photography or music) being sold as NFTs.
Ethereum is broken. Sure it’s the most popular blockchain and I use it all the time but it will never reach true mass adoption if gas fees keep going up whenever the network gets busy - the network is literally throttling itself. Eth 2.0 is supposed to solve it and at the moment it’s scheduled for June 2022, however it’s already been delayed at least a couple of times so this date may still change.
It remains to be seen if it will be a typical 'buy the rumour, sell the news' or if the price will continue to go up after the upgrade but the release of Eth 2.0 will definitely cause some price movements.
Until Ethereum becomes fast and cheap to use, we need other solutions. It looks like zk-rollups are likely to be the solution to this. If you’re not familiar with zk-rollups, you may want to check out this video. There are a couple of tokens going to be released soon and they will likely present a great investment opportunity so I would check out zkSync and Stark Ware.
Cardano (ADA) has been on a downtrend since the release of smart contracts in early September. Although we've seen a bit of a breakout in the last few days, I think we will see a continuation of this general downtrend (or sideways movement) until we start seeing some true utility in the Cardano ecosystem. It will come, I have no doubt about it, but I think it may still take a few months. If the market picks up overall, we will likely see Cardano going up as well but the true parabolic move up will likely happen only after the whole ecosystem properly launches.
As a closing word, I don’t expect all of the above to happen at the same time. I think these events will be stretched out over quite a long period of time – for example, I expect zk-rollups to kick off in early 2022, while Eth 2.0 or Cardano ecosystem will likely flourish in the second half of the year. If anything, this just means that we will have even more opportunities to invest and move our profits around to compound the results. I think 2022 will be an extremely exciting year for the crypto space and I’m really looking forward to it!
If you found this article interesting, please check out my YouTube channel – I post there market commentaries, my thoughts about various altcoins and NFTs and tutorials for beginners and more advanced users. I also mention a lot of altcoins and NFTs on my Twitter.
Disclaimer The content covered in this article is NOT to be considered investment advice. I’m NOT a financial adviser. These are only my own speculative opinions, ideas and theories. Do NOT trade or invest based purely upon the information presented in this article.