Looking back on annual crypto forecasts now gives off a subdued vibe.
Yes, there are still some areas in which crypto hasn’t yet met our expectations, such as day-to-day use. Considering how the market has exploded, how much adoption has surged, we can’t help but suspect that everyday crypto payments will become the norm.
Crypto above and beyond expectations
In all other areas, crypto goes above and beyond most expectations. Not many would have dared to call for a new all-time high this year, after the market’s best-ever year on record. That reminds us to be humble in our predictions. Further, with such a short track record, we can’t really rely on history to tell us what comes next. We just have to wait and see.
Who would’ve suggested that cryptocurrencies will become the backbone of a virtual world where virtual real estate sales are a thing?
That happened, too.
Adjusting our expectations
Should we adjust our expectations with heightened optimism in accordance? If for no other reason than tradition, let’s keep our next-year forecast subdued as well.
There are a few big points of interest we expect to become a theme in the new year. The first is crypto regulation, which may or may not make great strides. While some nations haven’t been as fortunate, U.S. citizens continue to enjoy free crypto use as regulators focus on large-scale malpractices.
Cynthia Lummis, the “crypto Senator,” is scheduled to pitch a comprehensive bill regarding cryptocurrencies and virtual assets next year. Given everything she’s said so far, if the bill does come to fruition, it will give greater peace of mind to both large and small market participants. And it will likely do that without hampering the industry in any way.
Another big thing to watch out for is, of course, the price of bitcoin and other cryptos. Bitcoin is big, looking to close the year just short of $50,000 (one year ago? $29,000). The total crypto market cap at $2.2 trillion. Compare to one year ago, when every cryptocurrency’s total value was a mere $760 billion.
But the bears haven’t gone away… As usual, we have skeptics forecasting $10,000 bitcoin next year. On the other hand, we have enthusiasts calling for $100,000 bitcoin. That, at least, hasn’t changed.
The backdrop of these forecasts, however, has changed staggeringly. In early 2018, calling for $10,000 bitcoin would have been very bullish. Now, it’s bearish almost to the point of disbelief. And when bitcoin hit its infamous 2017 all-time high of $19,000, those $100k forecasts had an air of insanity to them.
These days, bitcoin doubling in price again? Well, that looks like something we’ve seen happen over and over and over. Not to be able to imagine yet another price doubling strains credulity.
Altcoins coming into their own
Looking beyond bitcoin, we can’t wait to see how Ethereum, Chainlink and the other senior altcoins diverge and form a market of their own.
While bitcoin is no longer totally correlated to other cryptocurrencies as it has been for most of the market’s history (when the total market cap was 90% bitcoin), crypto prices still have a tendency to flock.
We’re waiting to see a breakdown in cross-coin correlations. Less interdependence in price movement, with coins moving up and down independently of each other (like stocks do) will tell us the cryptocurrency market is maturing. Lower correlations mean cryptocurrency investors are buying a specific coin for a reason. Chainlink as an investment in smart contract utility. Aave as a bet on DeFi growth. Ethereum to capitalize on the growth of the ERC-20 protocol via NFTs and metaverse apps.
Ah yes, the metaverse. The most curious development with the least certainties is the virtual world. Some want to overhaul the internet to run on blockchain. Others seem content with developing an upgrade of Second Life. Game developers promise we’ll be able to carry our avatar’s inventory with us across virtual universes, across games.
How will these things unfold? Will they intertwine? Only time will tell, but the discussion itself shows how dizzying crypto’s growth has been.
One thing’s certain: the future will never be boring.