The holiday season is ripe for assessments and perspectives in all areas. An exercise that does not escape the cryptocurrency sector throughout the year. With predictions that are sometimes more guessing than visionary, the seriousness of which is often measured by the content of the issuer’s portfolio. But the formula takes on a completely different value when it comes from a recognized analysis framework. With the aim of making an inventory of last year. And this to consider a sequence of events with a very relative probability. Spoiler alert: Some current giants could disappear from the top 10 in 2022.
It is always much easier to position yourself on an issue after the battle is over. A specialty widely practiced by certain self-proclaimed “specialists” and traders in the field of cryptocurrencies. And whose purpose is to pretend that all the big industry moves were predictable once they happened. Particularly in the current bull market situation where some people see the end taking shape. While at the same time, others are positioning themselves on explosive recoil to new heights.
A cacophony in which the recent annual report from the Arcane Research structure might bring some clarity. But also a necessary perspective on last year to consider a possible continuation. Although it is taken into account that the further these forecasts move away in time, the more their reliability decreases exponentially. But with great trends that are sometimes surprising or simply obvious. And above all, the announcement of the degradation of certain giants of the sector present in the current top 10.
2021: “ups and downs, but mostly ups and downs”
But first of all, the exercise must go through last year’s evaluation phase. And in the field, observing the structure of Arcane Research boils down to “ups and downs, but mostly ups and downs. It’s not too risky for a crypto market with legendary volatility and in the middle of a bull market period. But with some events presented as positive, impossible to ignore. And first of all, the adoption of Bitcoin as legal tender in El Salvador. But also this brand new trend of large companies to add Bitcoin in their treasuries, with the maximum spearhead of the MicroStrategy company. And finally, the establishment of a first Bitcoin ETF backed by the United States Securities and Exchange Commission (SEC), very crypto-allergic.
“As Bitcoin made its way into traditional investors’ portfolios, macro news started to affect its performance. Inflation has been high throughout the year and overall, Bitcoin has proven to be a good hedge. However, he was also sensitive to the statements of the FED and the fear of the big financial markets. In this sense, Bitcoin has behaved as a risk asset. ”
On the more negative news side, Arcane Research essentially retains the Chinese-initiated witch hunt against Bitcoin miners. But that can also be good news for your autonomy. Particularly considering that their network quickly adapted to this forced migration, once again proving its strength in the face of censorship.
Finally, this report points to the very strong emergence of the altcoin market, whose performance has “overshadowed” that of Bitcoin. With “several short-lived bullfights in various parts of this market. And as the main examples cited: DeFi, NFT tokens or the highly controversial “memecoins” (shitcoins?). With bullish momentum particularly concentrated in Ethereum and the multiple blockchain projects, whose respective ecosystems are only growing.
Crypto Market Outlook for 2022
A year 2021 full of emotions and twists and turns, before which the 2022 edition could have difficulties to do better. However, Arcane Research does not stop announcing certain probable upsets, in view of its balance sheet. The prospects are sometimes almost obvious. And others more surprising in relation to certain projects in the sector or the evolution of the market in the coming months. With, broadly speaking:
- Not surprisingly, Bitcoin continues to outperform the S & P500 index in 2022.
- Ripple’s XRP and Cardano’s ADA cryptocurrencies will break out of the top 10. This will benefit projects like Binance’s BNB, current winner by KO with the best annual performance of the current top 3 (1344%). And an Ethereum that has “crushed Bitcoin” with its 455% return, while at the same time losing its place as the “only” smart contract platform. “
- Projects with mid- or low-cap cryptocurrencies (mid- and small-cap) will be the most promising for the year 2022. With “a mid-cap index, the big winner of 2021 with its profit of 830%. “And this especially within the multiple ecosystems that are developing in the new layer 1 type networks.
- Blockchain projects whose performance has far exceeded that of Ethereum in 2021. And that should continue in this direction, according to Arcane Research. With increasing adoption. And results that will continue to outperform ETH in 2022.
- Gaming companies will continue to integrate NFT technology into their virtual worlds. With a year 2021 presented as a true explosion in this sector. And the entry of big brands, eager to take advantage of this opportunity as soon as possible. All this with an Ethereum network unable to handle the success of these NFTs, “creating opportunities for other higher-performing blockchains.” “
- A Lightning Network whose adoption has increased by more than 200% in the last year. With a current capacity estimated at more than 3300 BTC. And whose outlook from Arcane Research foresees a breach of the 5000 BTC threshold by 2022.
More stock prices and institutional investors
Finally, the Arcane Research report predicts a significant movement of cryptocurrency-related companies, whose strategy should move towards an IPO. A controversial development logic, started by Coinbase earlier in the year. And this in the context of a growing interest from institutional structures for the cryptocurrency market. With a centralized exchange sector in which Binance should remain the leader. But this before the strong expansion of the outsider FTX, whose development accelerated dramatically in 2021.
With another important point, the unprecedented development of the stablecoin market. A veritable explosion, one of the possible consequences of which would be to see the USDC dethrone the current leader of the USDT in 2022. All this in the face of mounting pressure from regulators that should only increase. And with the direct consequence, the development of decentralized stablecoins to escape this reality.
A vision that seems quite realistic and well constructed in view of the current state of the market. But impossible to get rid of the inherent instability of the cryptocurrency industry. In particular, if we take into account the always possible appearance of new sectors, the explosion of which leaves everyone in shock each time. And the best example of 2021 on the field is still arguably the metaverse case.
This article is about what’s new in cryptocurrencies. This is not financial investment advice. Any position that is taken must be accompanied by a personal investigation and requires crossing several sources before embarking on it. DYOR!
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