With less than a month to the end of the year, CEO of the crypto research firm Messari, Ryan Selkisshared what he believes are the nine trends in cryptoadoption heading into 2022.
In the first chapter of the document entitled “Crypto dissertations for 2022Said Selkis that he sees the emergence of cryptocurrencies as “inevitable” in today’s world. However, he also said that while Bitcoin (BTC) still has some way to go, hodlers should prepare for yet another “crushing” cryptocurrency winter.
1. The collapse of institutional trust
The first major element that Selkis mentions in his report is what he calls the “collapse of institutional trust.”
With a lack of confidence in governments’ ability to provide adequate funding for future pensions, high inflation that no longer seems “transient” and rapidly rising levels of government debt, cryptocurrencies now represent “a lifeline” for many people, according to Selkis.
However, he also reminded readers that “things can get worse before they get better” and that crypto companies and users can expect uncaps and censorship in the midst of continued “crackdown.” in especially the United States.
2. The inevitability of the crypt
The second major theme this year, according to Selkis, is the advent of Web 3.0 and crypto.
“I’m convinced of that […] we are on the brink of a total transformation of the global economy. A transformation that is bigger than the mobile phone, and maybe even the internet itself, ”Selkis wrote.
He added that three scenarios are currently possible:
- A “blow-off top” before the end of the first quarter of 2022, followed by a “flatter but still painful perennial bear market”;
- A sharp rise to a total market value of $ 20 trillion, which would make it a “bubble” like the dotcom boom;
- A slow and steady climb – usually called the superbike theory.
Bridges and DAOs
The Messari chief highlighted the need to improve the “underlying crypto-infrastructure”, including solutions for scaling and interoperability, as well as tools to make decentralized autonomous organizations (DAOs) more efficient.
“The biggest handicap in crypto today is the lack of bridges,” Selkis pointed out, adding that those who build the best cross-chain connections “will inherit the (virtual) land.”
As for DAOs, he said his company has invested heavily in building an “Web3 participation operating system.” He believes that “token-driven markets” in the long run will replace companies as we know them today.
4. The decoupling of cryptocurrencies
By “decoupling”, Selkis refers to the formation of different segments in the crypto landscape. He pointed out how the market has moved away from using the general term “cryptocurrencies”, to now distinguish between decentralized finance (DeFi), non-fungible tokens (NFT), currencies, etc.
“It’s still a meme-driven market, but many of these memes reflect – I dare say – the basics,” Selkis wrote.
5. Venture capital becomes permanent capital
“The amount of capital that has flooded the crypto industry this year is staggering,” the CEO said.
He also noted that some of the crypto-investment funds that exist – such as Multicoin capital – could be among the most successful companies in history, with many of these companies now managing billions of US dollars.
“Larger capital allocators continue to move upward in the risk curve amid negative interest rates, and most simply can not afford to ignore crypto anymore,” Selkis added.
He then explained that this greater presence of institutional investors is likely to allow the market to avoid crashes like those it experienced from 2014 to 2015 and from 2018 to 2019.
6. How far can the market go?
When asked how high the market can go before a downward trajectory, Selkis suggested that readers keep an eye on the so-called market value to realized value (MVRV) ratio for Bitcoin.
“If you are not a HODLer and can not handle four-year bear markets, then whenever MVRV hits 3, it tends to be an appropriate time to take some gains,” he wrote. He added that a good time to buy was when the same relationship hits 1.
“If history were to repeat itself, then what does it mean in dollars? Achieving an MVRV of 3 again this year would put us in the range of $ 100,000-125,000. Not bad,” said the CEO of Messari.
7. Survive the winter
Selkis made it clear that crypto winters are one of the hardest things for many people. “Many will lose faith and not be able to withstand the crushing decline of several years,” he said.
To be better prepared, however, Selkis offered three tips:
- Do not use leverage as the crypto is already volatile enough,
- Plan ahead of the tax season to avoid unpleasant surprises,
- Do not try to short the market.
8. Better access for public investment
Selkis referred to the public listing of Coin basealong with the launch of the first Bitcoin futures-backed exchange traded funds (ETFs) in the US earlier this fall, has been essentially free marketing for the crypto area.
What is important is that it reached a segment of the population that otherwise probably would not have learned about it, the CEO wrote.
9. Copy trade
Finally, Ryan Selkis noted that crypto trading in particular tends to be “social and memetic.”
“Just look at how quickly retailers ‘monkey’ new projects backed by some of the most successful investors in the industry,” Selkis wrote, reminding readers that capital is “very liquid” and that it continues to gain momentum as it moves from one market sector to another.
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