2021: A Year in Review and Look Towards the Future for Crypto
- ateekberg
- Jan 5, 2022
- 5 min read
What a year it has been. From the Gamestop short-squeeze to the surges of memecoins, 2021 was the year of the retail trader. As a result, one of the defining events of this year has been the continued ascent of cryptocurrencies and Web3 in general. Thus, we have created a summary of the key events that have happened in the space this year as well as an 2022 outlook of what coming changes we believe will occur, and last but not least, a look at how investor Joe has done these past months. Some links to key terms will appear throughout the text if you want to learn more. Happy holidays, enjoy!
What made this year so special?
A time period becomes special as a result of the underlying events within them. For crypto, 2021 was very special and extremely hectic. Here is a quick summary of the key moments that occurred every quarter.
What made this year so special was the explosion of growth and innovation within the ecosystem of this space. This was the year in which the use cases unrelated to Bitcoin (Defi, smart contracts, NFTs, etc.) became validated. From the acceleration of the adoption rate of cryptocurrencies among individuals, governments and companies, to the outburst innovative projects in multiple sectors, one can see 2021 as one of the early years wherein crypto has cemented its foundations within the world.
The Bitcoin Journey
As with all aspects of life, your perspective changes as time spent on a topic (and thus knowledge) increases. On the surface, this whole space of digital assets can not only look messy but, frankly, greedy. Admittedly, it is hard to see how this industry has the potential to change the world for the better if just looking at the crazy memes on Instagram. However, as your journey continues, you will gradually start to discover how this truly fascinating and revolutionizing space serves a greater purpose than making some crazy TikTok millennials rich.
To exemplify this, below you will see an own-designed figure highlighting this concept in the case of Bitcoin. Of course the space in itself is revolutionary, Bitcoin is an excellent example given the events of this year. Not only have major companies such as Tesla begun adopting it, but it has become a legal tender and currency in the nation state of El Salvador. Despite it being so recent, it has already shown promising success in certain aspects with more people having Bitcoin than bank accounts in the country. Thus, already having an incredible impact on financial inclusion. The figure bellow shows what you can think of as a general development of motives as your knowledge and time spent in the Bitcoin- rabbit hole increases. As you move upwards to the right, you will start to discover really why Bitcoin is inherently disruptive.
The Investor Joe Summary
Allocation and performance of the 600$ invested over the past 6 weeks.
It hasn’t been the best months for investor Joe, but he is still bullish on the space and has told us he is willing to continue trading into 2022! After all he is a strong believer that time in the market > timing the market. He aims to outperform the S&P 500, if he plays his cards right he thinks he can outperform BTC, by getting into sound alt coins. Joe will continue to DCA 100$ every week. (As our team grows we will get more manpower to dissect trades further and build more complex strategies however) for now Joe aims to keep it simple, occasionally picking up alt coins to expose readers about the space beyond the dominant BTC and ETH.
Our Predictions for 2022
To finalise the end of this year, we thought it would be fun to share with you our individual outlooks regarding what we can expect for Web3 (cryptocurrencies, NFTs, decentalised technology, etc.) in 2022. Of course you should NOT take this as financial advice but rather a set perspectives to hopefully learn from.
Sebastian Motelay:
Bitcoin will outperform the SP500
Ethereum will outperform BTC
NFTs will get an even broader adoption and new use cases will emerge
Decentralized stablecoins will grow 5-10x in market cap
Erik Gunnarsson:
Will see another BTC & ETH all time high, followed by a crypto winter, although perhaps not as aggressive as the 80% drawdown as seen in 2017/2018
Defi market cap will hit an all time high
Algorithmic based stable coins will flip centralized ones, such that top 10 stable coins will be algorithmic dominant.
2022 P2E gaming yields > 2021 P2E gaming yields
Viktor Svensson:
Defi market cap will hit an all time high. Today Defi represents less than 1 % of global banks market cap, i.e the long term upside is huge
BTC will continue to demonetize gold and other assets sharing the purpose of preserving monetary energy. More specifically, BTC will outperform all other forms of store of value-assets (Gold, S&P 500, real estate, debt etc)
Regulations will hit the market hard (Tax, KYC/AML, stablecoins and so forth), causing at least one or several temporary corrections
The ´´meme-hype´´ will become less prevalent. Investors will become more selective in their allocation of capital as the market matures, pursuing only worthwhile projects characterized by real use cases and value creation. Hence, the evolution will accelerate, which will threaten the survival of (at least in terms of the price) so called ´´shitcoins´´.
ETH will reach an all time high, but it needs to watch its back - there are a lot of competitors trying to dethrone ETH
SOL will increase its market cap substantially relative to ETH
BTC will become official legal tender in at least one more country
Alexander Ekberg:
The continued adoption of Bitcoin as a legal tender and national currency among developing economies as they want to move away from their reliance on the US Dollar and slow inflation
Projects which focus on the core infrastructure within Web3 (DAO tooling, inter-protocol bridges, etc.) will rise to prominence as one of the hottest investments in the space given their existential need in order to generate greater efficiency, scaling and interoperability within the space.
The cryptocurrency market in general will reach all-time-highs as there is further adoption among institutions and individuals in terms of both investment and uses (e.g. smart contracts)
The Conclusion
To conclude, 2021 has been an incredible, exciting year for crypto. We've seen a Cambrian explosion of innovations coupled with the mass recognition that this is has potential to be disruptive. However, this is just a beginning. As more financial and human capital flows into the space, we can expect an exponential trend of productivity, efficiency and adoption over the coming years. 2022 will hopefully prove this expectation.
The Digital Assets Society want to thank you for joining us on this journey of learning and exploring this space. Hope you have learned something new or, at the very least, gained a new excitement and interest. We can promise you a continued improvement of this weekly newsletter as well as future events, meetings and a podcast. So stay tuned!
Here are some book and report recommendations you should add to your 2022 reading list:
Messari Research Report: Crypto Theses for 2022
The Bitcoin Standard - Saifedean Ammous
Principles - Ray Dalio
Digital Gold - Nathanial Popper
The Age of Cryptocurrency: How Bitcoin and Digital Money are challenging the Global Economic Order - Michael Casey & Paul Vigna
If you want more please check out our website. We will soon be adding a page where you can find all forms of sources to learn from.
Anyhow, Happy New Years!!! Hope 2021 was a great year for you all and that 2022 becomes even better :)
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