The cryptocurrency market in 2022 will focus on the compatibility and scalability of the blockchain platform.
Natasha Che holds a PhD in Macroeconomics and is the founder of Soundwise and Tascha Labs. This economist is currently providing regular information on Web3 trends, blockchain, as well as comments and predictions.
Natasha Che tells us that GameFi will continue to grow in 2022 so that users own digital assets.
Three market predictions in 2022
The cryptocurrency market will grow strongly in 2021, which will lead to a number of new trends such as NFT, GameFi. Investors also wonder when they want to enter the market in 2022.
Che said the cryptocurrency market trend in 2022 will revolve around three main pillars: Layer 2 blockchain technology solutions, inter-chain interoperability, and money-making games.
Blockchain-based monetization games, commonly referred to as GameFi, tend to attract more attention than the Dogecoin coin memes of the year, according to Ms. Che. The growth of meme coins in 2021 is based almost entirely on the interest that comes from rumors and trends on the internet.
Combined with helping users own digital assets, this economist believes GameFi can grow even more than the coin meme trend.
“I think monetization games are more influential than coin memes because they are more fun and forcing people to do more than just buy and keep. They can create some kind of culture. Digitization,” Ms. Che said.
The competition between Layer 1 blockchains and Layer 2 technology solutions on Ethereum is increasing. So many new chains will gain significant scalability. In addition, more and more attention is being paid to interoperability between the chains.
“All the attention will be given to projects that facilitate cross-chain wealth transfers and the compatibility and connectivity of blockchain platforms,” said Che.
For the emerging and volatile cryptocurrency market, portfolio diversification is one of the most worrying topics.
Ms. Natasha Che believes that projects should be considered that emphasize cross-chain compatibility and multi-chain solutions.
Bitcoin’s role is becoming increasingly blurred
Natasha Che said there is currently no spike in the flow of money into the crypto market. The rules on monetary conditions and liquidity management will be tightened further this year as central banks around the world try to raise interest rates.
“In order for the Bitcoin price to rise, the market needs new cash inflows into crypto quickly. Investors will always put money into crypto, but I don’t think there will be any significant spike in the next 3-6 months, ”said Che.
With not much new money flowing in, this expert believes that the money in the market tends to migrate from high-cap coins to smaller but high-growth projects.
In 2021, the market capitalization of Bitcoin across the entire market, usually measured by the Bitcoin Dominance (BTC.D) index, plummeted. From almost 70% in early 2021, BTC.D is currently around 40%.
Although the value of Altcoins (other crypto currencies than Bitcoin) is still somewhat dependent on Bitcoin, more and more projects are growing strongly and are “turning against” Bitcoin.
Also the concept of the “Bitcoin maximalist”, which refers to the belief that the cryptocurrency market depends solely on Bitcoin, is no longer believed. In the reports of influential analysts like Messari, Bitcoin Maximalist is considered an outdated concept. Therefore, Ms. Che is proposing other investment directions in 2022.
“For those looking to diversify their portfolio, I would advise them to research quality projects in Layer 1 public blockchain, Layer 2, cross-chain solutions, or money-making games,” Ms. Che said.
This expert also said that it is not advisable to wait for a real ETF, which is an indirect investment in Bitcoin, to be approved by the US this year. While Bitcoin is often viewed as a type of digital gold, Che says that a gold ETF and a Bitcoin ETF are very different.
“Nowadays, more and more financial products in the world are giving everyone access to crypto assets. Whether you are an individual or an organization, buying bitcoin directly or indirectly is not difficult at all. 30 years ago a gold ETF acted as a catalyst for the price of gold, but time has changed everything. I don’t think an ETF will have an impact on the price of bitcoin, “said Ms. Natasha Che.