https://nasacademy.com/blog/article/crypto-predictions-in-2022
We are almost a quarter of the way into 2022 and the cryptocurrency markets have shown different shades of red and green in these couple of months. At the time of writing this, BTC is nearly 40% down from its all time high in November last year. The second largest cryptocurrency, Ethereum, is no different.
But that is a part of the game. So we’re not here to talk about price movements of individual cryptocurrencies. Instead, we’ll discuss some key themes around which the next narratives are going to form. This is, simply put, Nas Academy’s crypto predictions in 2022.
(Please note that this is not financial advice. We are trying to highlight the emerging trends in the crypto industry. In the last couple of years, the cryptocurrency market has followed various notions in the form of DeFi, NFT, Metaverse etc. We would also discuss how each of these individual niches are going to shape up in the future.)
As they always say, history repeats itself. Which is why, to predict the future, it is important to understand the past. In this section, we give you a brief overview of the industry in the past one year.
2021 was a year of gigantic growth for the DeFi platforms. An important metric to gauge the size of a DeFi protocol is to check the total value locked or TVL in that protocol. It is nothing but the total amount of crypto assets being locked up in it.
This figure moved from $17 Billion on December 31, 2020 to a staggering $252 Billion one year later on December, 31 2021. We shall be discussing more on this domain in the upcoming sections.
You saw this coming from a distance, didn’t you? NFTs took the centerstage in terms of the hottest topics of the year 2021. No, we aren’t claiming this. Even the Google search data validates that the number of searches for what is NFT surpassed what is Bitcoin in the year 2021.
We would be surprised if you would claim that you do not know what NFTs are. But if that is the case, check out this NFT article.
With the world’s largest social media company rebranding itself to Meta, the narrative around Metaverses changed forever. If someone who has built the best in class products around community and society bets on this concept, one has to agree on the enormous potential it holds.
As a result, Metaverse-based crypto tokens hit 4x growth towards the end of 2021 when this news came out.
There are two kinds of people in this space. One which is looking forward to making a quick buck by adopting this technology. Others who want to make a difference.
This section is meant for both of them. Not only would we cover some emerging trends in this space, but also talk about some problems that remain unsolved. Ones who manage to crack a solution to these problems can generate a lot of wealth for themselves.
We just discussed the gigantic growth DeFi has marked in the past year. But, for some reason, it hasn’t got the media love it deserves. Why? We feel there are a couple of reasons behind it.
For starters, DeFi is comparatively complicated to explain. There are too many elements at play in DeFi due to which mainstream media simply avoids talking about it.
Secondly, it is not as exciting and raunchy at an idea level. Think of it this way: would you rather talk about a monkey being sold for millions of dollars with your friends or an innovative technology that is likely to change the way banks work?
If you chose the former, you are a part of the majority and there’s nothing wrong with it. Just now you know why DeFi took a backseat.
We believe as more people explore the world of decentralized finance, these protocols are due for another year of skyrocket growth. Some analysts believe that the TVL may jump to $800 billion in the coming years.
With that being said, there are some key problems to be solved before we ‘go to the moon.’ The problems are as follows:
Currently, the user experience in DeFi and overall Web 3 space is broken. Consider this: when was the last time you had to refer to a YouTube video in order to learn how to operate Facebook? That is not the case in Decentralized Finance.
One may have to refer to some tutorials for something as basic as setting up a MetaMask wallet.
An analogy to understand this would be to think of Blockchains as cities. Each of these cities have their own banks (DeFi protocols). But real growth lies when these banks could talk and work with each other.
That is a missing piece of the puzzle in DeFi right now. A lot of Blockchains are trying to solve this problem but it is still not completely solved for.
The first two months of 2022 broke all the previous records of trading on OpenSea. A volume of $5 billion was traded on this platform in a single month.
With that being said, this euphoria is about to mellow down real soon. No, we are not saying that NFTs are dying. NFTs are here to stay. However, the NFTs with no utility are likely to take a backseat soon.
There are going to be NFTs that would serve as a part of a bigger Metaverse. Another use case evolving right now is of staking NFTs, wherein one could stake their NFT to earn an interest.
Other use cases could take the shape of meet-ups, consultation sessions, and collaboration opportunities.
In a nutshell, PFP based projects have had enough of the hype. It is time that they fade away…
Metaverse space is as hot as it gets. Thanks to Facebook, people are betting bigger on Decentralized Metaverses, like Sandbox and Decentraland.
Celebrities like Snoop Dogg have been investing in virtual lands in Sandbox to hold virtual concerts.
Our take is that this space is just getting started. JP Morgan predicts Metaverse to be a $2 trillion-dollar opportunity. In the year 2022, a lot of focus would be on developing neater and superior Metaverse experiences.
As the hype settles down, development activity would accelerate. Metaverse would not be confined to gaming and entertainment space.
As a matter of fact, corporations would try to use Metaverse as an alternate channel for marketing either by creating one for themselves or becoming a part of one.
Wait, what? What are meme coins doing in this list? Well, as we write this piece, the 24 hour volume for Dogecoin is $545,288,232. Laugh as much as you want, but this is no joke. A volume of $500M is not small by any means.
Money is an extremely interesting thing. Anything that people believe in, can become money. It has taken various shapes in the form of stones, crowns, animal skins, gold etc. since inception.
So, why not meme coins? We believe that meme coins are extremely unpredictable and can flip the positions in top 10 real quick.
With newer people entering into this space everyday, meme coins will continue to show some momentum. No one can tell for sure which meme coin will become the ultimate winner, but there has to be one.
Yes, this is democratization of wealth in its truest form. Axie Infinity created ripples in the gaming space last year where many people took it up as a legitimate career option. People started earning incomes more than their jobs (at least in smaller countries) through gaming alone.
We also saw multiple investors putting in money to buy equipment for the players so that they can get a share of the earnings of the player.
We believe that this trend is here to stay. With all being said, Axie Infinity isn’t the perfect P2E model out there. There will be iterations and newer players will jump in. One needs to keep an eye on this emerging trend.
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