Predicting 2022 Crypto Narratives

By DMoneyCanada | Free Lunch | 31 Dec 2021

2021 has been a year full of Crypto narratives.

When we began the year, it seemed like all the attention was on Bitcoin and Ethereum. People were beginning to see the possibilities which led to BTC and ETH seemingly hitting new all-time highs every weekend.

Then in April, Elon Musk began shaping a new narrative through his tweets and love for Dogecoin. For a time, it felt like Dogecoin could actually become a real currency… until it died off and the narrative became finding the next memecoin, aka. Shiba Inu.

In May, the narrative shifted negative and full of FUD, thanks in part to Elon and China banning Crypto for the nth time. As people began to question the environmental impacts of Bitcoin, true believers came in and bought the dip.

When the market eventually recovered around July/ August, we started to see a bigger shift towards NFTs. New NFT projects were being minted every day, piggybacking off the success of other collections and changing the narrative to buying and selling NFTs on OpenSea for hundreds of thousands of dollars.

Minting NFTs was fun… until people eventually got frustrated about paying hundreds of dollars in gas fees on Ethereum. This led to the rise of the alternative layer 1 narrative. Solana kicked off their price run in August, followed by Avalanche in November, and finally Luna in December. If you were a layer 1 blockchain that can do one thing better than Ethereum, your valuation deserves to be closer to that of Cardano.

Somewhere in between all of this, Facebook also changed its name to Meta, giving birth to yet another narrative, the Metaverse. People took every opportunity to buy Metaverse-related tokens and land on Sandbox and Decentraland, even if the graphics resemble an early 2000 beta game at best.

Finally, towards the tail end of the year, OlympusDAO’s insane APY sparked a DeFi 2.0 narrative of bootstrapping liquidity. True Degens were chasing OHM forks left and right, likely losing more money than actually making it.

On January 1st, 2021, if you had told me all these investment narratives and more would happen over the course of a year, I most likely wouldn’t have believed you. The speed of crypto adoption, better yet, the shift in crypto narratives this year, has truly been extraordinary. With this in mind, it’s hard for any investor not to think about what’s next in 2022. As we all know, outsized returns are made by entering into positions before it becomes a mainstream narrative, or in other words, before your financial advisor (on Tik Tok) is shilling it.

Here are my five crypto predictions for 2022 in no particular order:

  1. Play-to-Earn/ Gaming NFTs will steal the spotlight away from traditional NFTs with no utility

  2. Terra Luna is only getting started and is what will bring crypto mainstream

  3. DAOs will become the most popular way to fund projects and non-VC-backed narratives will take off (Ex. Frog Nation and Abracadabra MoneyDeFi Kingdoms, etc.)

  4. Ethereum will have a big year because of ETH 2.0, but it will be an even bigger year for layer 2 scaling solutions as people realize the limitations of ETH 2.0

  5. (Unlikely in 2022, but most definitely within the next few years)

    95% of projects listed on CoinMarketCap will lose all their value and never recover

Finally, more of a New Year wish than a prediction, but will 2022 be the year the Crypto market finally breaks out from Bitcoin dominance and influence?

Thanks for reading and Happy New Year! 

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