The crypto analysis company Arcane Research has released numerous predictions for the new year.This is what the crypto space expects in 2022.
In a final report for 2021, the Norway-based company throws Arcane Research take a look at the future of crypto space.
the report In addition to Bitcoin (BTC) and Ethereum (ETH), it also focuses on Memecoins, Layer 1 smart contract platforms and many other important crypto topics.
Gloomy forecast for Memecoins
The last year cannot be summarized without mentioning the absurd Memecoin rallies, some of which led to price increases of several thousand percent.Not long after Tesla bought Bitcoin, Elon Musk made it a habit to tweet frequently about Dogecoin (DOGE), which often resulted in extreme price increases.
Memecoins attracted a lot of attention, especially in the Reddit community.The DOGE rally resulted in other dog-related Memecoins also seeing dramatic price increases.
For a short time, the self-proclaimed Dogecoin killer Shiba Inu (SHIB) was even able to overtake the OG-Memecoin DOGE and made it into the top 10 largest crypto currencies by market capitalization.However, Arcane Research is convinced that most memecoins will fade into insignificance in 2021 and will be a historical relic of 2021.
“Bitcoin will outperform the S&P 500”
For the third year in a row, Bitcoin has outperformed both gold and the S&P 500.
Bitcoin is up over 70 percent this year.The S&P 500, on the other hand, has just risen by around 30 percent, while gold even suffered a price decline of around 7 percent.
The report from the Norwegian crypto analyst assumes that if the stock market continues to rise in the coming year, Bitcoin will again outperform the S&P 500.However, should we see a red year for the stock market, Arcane Research believes that Bitcoin will fall even more.
ETFs will grow strongly in 2022
2021 was a big year for Bitcoin-related investment products.
The rapid growth has prompted financial regulators around the world to finally approve spot-based ETPs in other countries in addition to the approval of futures-based ETFs in the US.
This has led to more and more BTC flowing into ETFs.There are now almost 850,000 Bitcoin in ETF products.
Arcane Research thinks it likely that this trend will continue and that there will be over a million BTC in ETFs by the end of 2022.
XRP and Cardano will fly out of the top 10
Based on the growth of the Binance Smart Chain (BSC) and the growing market capitalization of many Layer 1 smart contract platforms such as Solana (SOL), Terra (LUNA) and Avalanche (AVAX) in 2021, the analysts at Arcane Research predict that Ripple (XRP ) and Cardano (ADA) will leave the top 10 largest cryptocurrencies by market capitalization in the coming months.
Ethereum competitors will take off
In addition, they expect a variety of Layer 1 smart contract platforms to grow faster than Bitcoin and Ethereum in 2022.As in 2021, they believe that the increasing adaptation of these alternative blockchains will continue in 2022.
Layer 1 or on-chain solutions are blockchains in which all transactions are processed via the mainchain itself.With layer 2 or off-chain solutions, on the other hand, all transactions and their calculation take place outside the mainchain.
The report concludes that the strong performance of such cryptocurrencies will continue in the coming year.Arcane Reserach believes it is likely that Ethereum will increasingly lose market share in terms of users and the amount of funds stored (Total Value Locked) to these networks.
As a result, Arcane Research expects the adoption of other Layer 1 smart contract platforms to continue to grow, which should help their native tokens rise in price..
