Crypto Predictions 2022

Cryptocurrencies dropped off overall to start the year after Wednesday's sell-off saw Bitcoin wipe $80b off its market cap, as its price dropped from roughly CAD $60k down to $55k. Bitcoin which is often argued as an inflation hedge, did not respond well to the US Federal Reserve's announcement of a potential interest rate increase as it moved in tandem with a sell-off seen in the equities market.

With a wild start to 2022, one might question what is in store for the rest of the year. Here are our predictions on what we see will play out over the course of the year, and with that, our crypto picks for the year.

Adoption and Regulations

One of the main topics we expect to see throughout the year is the increase in crypto adoption, and to go hand-in-hand with that, more regulations from the government. Bitcoin has enjoyed many first-mover advantages, but last year's recognition as legal tender from El Salvador was a big step forward in terms of adoption. Having that said, we wouldn't be surprised if another country experiment with Bitcoin as a legal currency due to the hyperinflation experienced by some countries brought by the coronavirus.

Regulations in cryptocurrencies go hand-in-hand with adoption and we expect it be on the agenda this year. As adoption and interests in cryptocurrencies rises, governments may be motivated to put regulations in place instead of an out-right ban. We believe this may put negative pressure on the crypto markets initially, but it will be beneficial to the in the long-term. Regulation that work for cryptocurrencies may take some time to develop but it provides transparency, accountability to exchanges to protect the client's assets, and hopefully more security and trust to the end-user.

NFTs, Metaverse, and P2E Games

Opensea, the biggest NFT marketplace had an impressive 2021 with an estimated USD$15b in trading activity, a 646x increase from a year prior. We expect this trend to continue, predicting 3-5x increase as interest in non-fungible tokens rise with the Metaverse and play-to-earn (P2E) games. We expect the Metaverse to remain a hot-topic in the cryptocurrency market and are equally excited to see what's in development in the Metaverse world. Pay-to-win will slowly transition to play-to-earn as games like Axie and DeFi kingdoms continue to gain interest.

Boom or Bust?

With a rocky start to the year, some are calling for a massive correction while some experts are calling for Bitcoin to top $100k USD this year. My prediction is for both to occur: a correction due to the current state of the economy, before recovering and reaching new heights. I am expecting the competition between layer-0 blockchains to heat up, launch of central bank digital currency (CBDC) in China, and the death of meme coins as users opt for coins and token that offer actual utility and value.

Cryptocurrency Picks for 2022

Here are our picks of the year and why:

• Cosmos (ATOM): With competition between blockchains heating up, I believe there is more than enough space for a few top players, which is why interoperability will be key. Blockchains with the ability to communicate with one another will push cryptocurrencies and blockchain to become mainstream by streamlining the end-user experience. Cosmos started the year off at about $42.
• Crypto.com Coin (CRO): Crypto.com's advertising spree will continue into 2022 with a spot on the Super Bowl. Crypto.com's exposure with partnerships in the UFC, Formula1, and the Crypto.com Arena, the well rounded experience on the Crypto.com platform, and regulation hurdles surrounding Binance should bode well for the exchange; attracting new users and driving up the token price. CRO at start of year: $0.70
• Algorand (ALGO): I've been paying more attention to Algorand near the later half of 2021 and have been seeing some promising development in their ecosystem. I enjoyed taking part of the Algorand governance and have played around with a few dapps. With a price point near Cardano, (I do own both) I expect Algo to outperform if they keep the momentum going. Algorand at start of the year: $2.10
• Mina (MINA): Self-proclaimed as the world's lightest blockchain at just 22kb and powered by participants, Mina is a relatively new blockchain launched last year, and with a lightweight blockchain it lowers the barrier of entry to participate in the protocol as fosters decentralization. Mina at start of the year: $4.49.

As always, do your own research before investing. As a disclaimer and full disclosure: My picks for 2022 is my own opinion and should not be taken as financial advise, I invest in what I believe in so I hold all the coins/tokens mentioned. It will be fun to review at year-end to see how my prediction plays out!