Experts have opened the curtain of the crypto world in 2022.

2021 has been a tumultuous year for cryptocurrencies. The total market value of cryptocurrencies increased by $1.5 trillion in 2021, up to $2.3 trillion.

Thanks to the growing institutional adoption, bitcoin has reached a new record high of almost $69,000 because companies like MicroStrategy, Tesla and Block (formerly Square) have added the digital currency to their balance sheets. In addition, El Salvador became the first country to accept Bitcoin as a legal currency alongside the US dollar, which attracted the attention of other countries that followed the same path.

Celebrities, celebrity athletes, and even mayors of Miami and New York have decided to convert some, if not all, of their salaries to Bitcoin. But 2021 was a stellar year, not only for Bitcoin. Ethereum, the second-largest cryptocurrency, also skyrocketed to a new all-time high of nearly $ 4.900, fueled by the explosive growth in decentralized finance, non-fungible tokens, and network activity linked to the Metaverse.

Last year was a record for the crypto industry. In March, digital artist Beeple sold for $ 69 million. Coinbase became the first US cryptocurrency exchange to go public on the Nasdaq in April. In May, the cryptocurrency market plummeted after Tesla CEO Elon Musk stopped accepting bitcoins as a means of payment, citing the enormous amount of energy spent mining the token. Gradually, the popularity of memes, including Musk’s beloved dogecoin and rival Shiba Inu coin, has skyrocketed.

In the summer, Layer 1 protocols such as Solana, Avalanche, and Algorand vied for the fastest, lowest cost, and most scalable developer platform. In addition, the decentralized world associated with the Metaverse and the sandbox gained widespread acceptance after Facebook renamed itself Meta. Finally, captivated by the myriad opportunities in the cryptocurrency space, venture capitalists have poured a record $ 30 billion into blockchain companies seeking to usher in the so-called Web 3.0 era.

Of course, more responsibility comes with more popularity. The crypto industry still has many significant challenges to be addressed in the coming year. According to Chainalysis, in 2021, scammers stole $ 7.7 billion worth of cryptocurrencies from victims, which is 81% more than a year earlier. Meanwhile, disagreements over whether the dollar reserves of some USD-pegged stablecoins are fully secured has led the industry into conflict with US regulators.

While there has recently been talking of impending winter in the crypto world, analysts, investors and industry leaders expect crypto adoption to continue in 2022, as even stadiums are being renamed after crypto companies and NFTs continue to interact with pop culture.

The Insider spoke to nine of them and summarized their predictions, which are included below.

Hong Fang is the CEO of Okcoin crypto exchange.

For Fang, 2021 was a year of creation, and in her opinion, it is an optimistic figure for the coming year.

Whether developers building decentralized apps based on smart contract platforms or artists using NFTs, the crypto industry has created a vibrant creator economy over the past year.

Fang said that bitcoin did not reach $100,000 by the end of last year as she expected under specific scenarios. However, since cryptocurrency is a highly dynamic market, it isn’t easy to know the price in 2022.

“This is a free market, but it is also a market that is driven by human behaviour, and human behaviour is not rational at all,” she told Insider. “People get ahead of ourselves, people get greedy, and then people get scared when something breaks.”

Over the medium to long term, it remains “very optimistic” with the capital and talent that continues to flow into the industry.

“2022 will be the year that a lot more talent will come to the metaverse and continue to grow across all kinds of different crypto communities,” she added.

She also sees different crypto assets drifting apart as institutional and retail investors alike begin to understand the unique technologies that each has to offer.

She still believes that Bitcoin is the king of cryptocurrency only because of its unique value proposition. But at the same time, she will continue to see different crypto assets separate from bitcoin because investors will start seeing other underlying value propositions for further efforts.

Jesse Powell is the founder and CEO of the Kraken crypto exchange.

Powell also expected Bitcoin to end the year with six figures. At the same time, it seems out of reach at the moment. However, he believes that growing public awareness and increased regulatory transparency could usher in a better year for the most prominent cryptocurrency in 2022.

Despite growing talk of a prolonged downturn, he doesn’t think massive crypto winter is around the corner. Instead, he said he would buy more bitcoins if the price dropped below $ 40,000.

“You just look at a 10-year chart, and it tells you everything you need to know,” he told Insider. “It has surpassed all other assets in the world.”

In 2022 NFTs will become “much larger” because of the prestige and aesthetic values associated with owning particular NFTs and their use cases such as traceability, borrowing and lending, the expert predicts.

“I think 2022 year will be the year of the NFT”, Powell said. “If I’m thinking like an investor, what platforms and coins will benefit from this? I think these are some of the well-known decentralized worlds”.

Kyle Samani – Co-founder and Managing Partner of Multicoin Capital hedge fund.

Despite the bearish sentiment darkening the cryptocurrency market, Samani is optimistic that “we have not seen highs for BTC, ETH or SOL”.

But after all the technological breakthroughs over the past year, he has changed his mind about bearish digital asset markets.

In his opinion, the next downturn, whenever it occurs, will not be the same as the last one that happened after the raging Bitcoin bull market in 2017. Technologies launched in this cycle are put into actual use.

“The buzz of 2017 was explained by the fact that nothing worked,” he told Insider. “This time, it is no longer correct to say so. This time everything works. There is real utility, and you can see its value. “

As a result, he expects the dynamics of other tokens to be decoupled from Bitcoin.

“I think you will continue to see bitcoin behave differently from the rest of the market. Traditional views on cryptocurrency were that other assets were dependent on BTC or were simply a higher beta version of it, “he said. “The point is that all these assets perform different functions, and they have different functions, different utility.”

His crypto hedge fund is betting on Solana’s Level 1 Protocol (SOL), Helium’s Decentralized Blockchain (HNT), and Graph Indexing Protocol (GRT) to build a portfolio of tokens backed by solid technology underpinnings.

Armando Aguilar, VP of Digital Assets Strategy at Fundstrat Global Advisors.

Aguilar had expected Bitcoin to hit $ 70,000, but the confluence of macroeconomic factors made him more cautious about the 2022 year.

According to him, the Fed’s decision to potentially raise rates three times in 2022 and double the pace of tapering, combined with the rapidly spreading Omicron option, persistent supply chain problems, heightened inflation and the US midterm elections, will cause market volatility, he said.

However, he expects Bitcoin to rise to six figures by the first half of 2022, as institutional adoption and inflation concerns persist. Meanwhile, he believes Ethereum will surpass $ 9,000 thanks to the continued growth of decentralized finance, NFT, and metaverse-related activities.

In particular, as institutional and retail demand pushes DeFi to new heights, Ethereum is likely to outperform Bitcoin. He noted that in 2021, almost 25% of all rounds of venture funding – 428 deals worth about $ 1.9 billion – were concentrated in DeFi.

“Regulation has slowed investment in DeFi in the second half of the year, but continued enactment and regulatory legislation may continue to drive growth in this area,” he told Insider.

By 2022, it will have six high-reliability altcoin baskets on its radar.

These include DeFi tokens, Boba Network (BOBA), Yearn. Finance (YFI), Aave (AAVE), and 1inch (1INCH); Layer 1 protocols such as Polkadot (DOT), Avalanche (AVAX), Kadena (KDA), Solana (SOL), Terra (LUNA), Cosmos (ATOM), and Algorithm (ALGO); two-level network Polygon (MATIC); infrastructure games such as Helium (HNT) and giant protocol (GIC); visualization of a token associated with the Metaverse (RNDR); and gaming guild platforms in general.

Tony Fenner-Leitao – President of Cambrian Asset Management hedge fund.

According to Fenner-Leitao, 2022 is likely associated with regulation that could bring more clarity and transparency to the crypto industry.

His firm, which manages nearly $ 300 million in assets, claims to be the first digital asset manager for JPMorgan and the first digital asset manager to be funded by JPMorgan. A crypto hedge fund follows a systematic quantitative model to minimize liquidity and regulatory risks. It does not place targeted bets on any particular token.

“The regulatory aspect is essential for several reasons. It extends from token trading, token storage and regulation of participating companies,” Fenner-Leitao told Insider. “All this is very useful and gives people confidence that at least they understand and see the stability of these currencies. We expect many of them to become more and more regulated. “

A critical regulatory development in his field of vision is whether the SEC classifies specific tokens as securities.

“There are many discussions and assumptions about what tokens are. We see them as investments at a very early stage”, – Fenner-Leitao told Insider. “I mean these are not securities, but these are early-stage projects that explore new technologies, new business models, new economic models and new management models.”

James Malcolm, head of monetary strategy at UBS.

Malcolm, UBS’s lead currency strategist, recently highlighted three significant trends. First, Insider believes it will shape the overall cryptocurrency market in 2022.

a. A double-edged sword of regulation.

The regulation of activities in the crypto industry has been a very relevant topic lately. Still, Malcolm believes investors should be optimistic because, in the end, “the decision is likely to be positive, paving the way for wider acceptance and wider participation.”

“This structure is pretty clear and somewhat unattractive to many players in the crypto world, so it is currently being played down,” he explained to Insider. “But it is obvious that stable coin providers, crypto wallets, DeFi exchanges, etc., in the eyes of most US regulators, will be regulated more like traditional financial market participants.”

b. The influence of crypto technologies will grow.

“Whether you love crypto or don’t like crypto, whether you want to participate or don’t want to participate, it will be tough to avoid,” said Malcolm. He shared that the number of cryptocurrencies and IPOs will only increase as the number grows – players in the market.

“We are at a stage where many of the leading companies are becoming more interested in crypto and are looking to do more in the crypto world,” he said, citing Robinhood and Meta as examples.

c. The basics will make the difference.

The main topic on which blockchain was focused last year was scaling. In 2022, according to Malcolm’s prediction, the “next big thing” will be the idea of blockchain interaction. And it will begin to “destroy the surprisingly linear relationship that exists between blockchain activity and the token.”

d. Prices.

Since the compatibility of blockchains increases their interchangeability, this, in his opinion, should also “provide more direct comparisons between different coins, and not between each coin, which is being traded based on its own history”, taking into account factors such as coin supply and ownership structure.

“At the moment, the game of cryptocurrency, first of all, is whether it goes up or down and whether you can guess in the news coins that are growing more than others,” Malcolm clarified. “In the future, it should be more about relative value -an alpha game in the space, and not just a beta version of what is rising or falling in the market.”

Brian Mosoff, CEO of Ether Capital.

Rosoff, CEO of Ether Capital, predicts another crucial annual milestone for cryptocurrencies in 2022. He recently identified five trends for Insider that he believes will shape the market over the next year.

• Solana will give the heat.

“I think Solana is still worth watching. A huge community has rallied around Solana. Their argument is using another programming language – Rust, which may have more flexibility or more developer support from users who are not familiar with Solidity – the language of the Ethereum network. So, Solana, for me, it’s kind of a precursor to this group of ETH competitors,” Mosoff said.

• Sale on air.

Many crypto investors must pay heavy taxes in early 2022 after a year of colossal crypto profits.

“So, during the first month and a half of 2022, there may be a massive sale. Maybe this will force people to sell ETH to fulfil their tax obligations,” Mosoff noted too.

• “Regulation” – is a buzzword.

While Mosoff says there won’t be any groundbreaking cryptocurrency regulations in 2022, he stresses that investors and other countries will scrutinize the US approach.

“The US wants to do it right, and it recognizes that the stakes are higher than ever,” he said. “There are only crypto assets worth over $ 3 trillion, not counting businesses and these estimates. And so, they recognize that there is an opportunity here to become a leader in the free world for this new asset class. “

• The rise of the DAO.

“More anonymous, global coordination between developers and the DAO is what you’ll see,” Rosoff explained regarding decentralized autonomous organizations, also known as DAOs.
“Regulators, suddenly or unintentionally, end up incentivizing or encouraging developers to be more anonymous outside of jurisdictions they can control. So it will be a very tricky balance.”

• The rates are paying off.

Rosoff predicts that betting – transferring crypto assets onto the blockchain in exchange for generating passive income – will gain in popularity next year.

“As more investors begin to feel confident and comfortable with the asset class as a whole, they will look for other ways to participate,” he said. “And one of them is to buy those tokens that have historically not been profitable and turn them into tools to increase profitability.”

Mike McGlone, Senior Commodities Strategist, Bloomberg Intelligence.

The senior commodities strategist at Bloomberg Intelligence, McGlone, believes cryptocurrencies will dominate in 2022 as the asset class trumps more traditional investments.

“We expect the US to adopt cryptocurrencies in 2022, with proper regulation and associated bullish price implications,” McGlone wrote in a December note. “Compared to the broader stock market, which hasn’t had a 10% correction since the 2020 panic, the cryptocurrency market could have a relative edge in 2022.”

“The intention of the Federal Reserve to remove the punch bowl and lower bond yields may indicate a macroeconomic environment in 2022 that will favour the leading cryptocurrencies, Bitcoin and Ethereum,” he continued. “Crypto-assets showing diverging strength versus stocks towards the end of 2021 could herald further digital asset dominance in 2022.”

In addition to Bitcoin and Ethereum, McGlone is also optimistic about stablecoins, which he called “crypto dollars.”

“Strong crypto dollars, along with Bitcoin and Ethereum, are poised to remain at the top of the ecosystem against about 15,000 rivals vying for speculative leadership,” he said. “Binance Coin, Solana and Cardano replaced XRP, Bitcoin cash and Chainlink almost a year ago.”

Specifically, McGlone believes Bitcoin is in a consolidating bull market, while he calls the Ether bull market more “resilient.” And he said his optimism would continue even if the tightening of monetary policy turned into a stock market crash.

“Bitcoin will face an initial headwind if the stock market falls, but to the extent that declining stock prices pressurize bond yields and stimulate central bank liquidity, crypto could be the main beneficiary,” he explained.

Due to the continued growth in the popularity of cryptocurrencies, traditional asset managers will also be forced to step up their activities — this is one of the critical catalysts for McGlone’s optimistic view.

“Past financial performance is not future results, but when a new asset class outperforms traditional ones, sceptics have no choice but to join them,” he said. “We see this process will play a paramount role in 2022, as wealth managers may face great risks if they still do not have portfolios dedicated to cryptocurrencies.”

Alex Svanevik, co-founder and CEO of the Nansen blockchain analytics platform.

Ethereum’s value skyrocketed last year, and its ETH token has risen in price by about 560%, from $ 730 to $ 4,860 at its highest level.

One of the reasons for the success of Ethereum last year was the rise of NFTs or non-fungible tokens. But blockchain was not without hurdles in November 2021.

“One of the major problems for Ethereum last year has been high costs”, said Alex Svanevik, co-founder and CEO of the Nansen blockchain analytics platform. “Naturally, there is a side effect on other circuits.”

“Alternative networks have become very popular, and some of them currently have millions of users,” he added. “I think you will continue to see this world grow stronger.”

Svanevik shared a list of the six leading “Ethereum killers” or blockchains, which, in his opinion, can compete with Ethereum in 2022, with Insider.

Top 6 Ethereum killers.

Among the competing Tier 2 blockchains, Svanevik singled out Avalanche as a potential threat. Avax, Avalanche’s token, skyrocketed more than 50% in November when developer Ava Labs announced a partnership with Big Four accounting firm Deloitte.

“Ethereum is trying to become the largest network in the world,” said John Woo, president of Ava Labs, in a recent interview for Insider. “They have an edge, but their technology isn’t that good – if they don’t roll out the updates, they’ll end up being MySpace or Friendster, not Facebook.”

Svanevik also singled out Binance Smart Chain (BSC), an alternative blockchain platform, as a new contender for the Ethereum throne and said he also follows Fantom and Polygon, two other tiers two blockchains.

“The emergence of a multi-chain universe could be a big topic in 2022. The rise of the Avalanche’s price coincided with the rise in the price of Fantom and Polygon, which suggests that there is a correlation with BSC as well”, Svanevik said.

In Tier 1 blockchains, Svanevik believes that Solana and Terra are the two biggest competitors.

“These blockchains have lower costs, higher throughput and shorter block times,” he explained. “They are among the main ones in which we are seeing an increase in activity.”

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