New Delhi: The year 2021 was a spectacular one for crypto assets as this new-age investment class went mainstream. Now, with the next year set to kick in, investors are trying to understand which themes they can ride to make the most out of crypto investing.
Industry experts believe 2022 will likely be a year of filtration in the crypto space as tokens with relevance, utility and sound fundamentals will attract investors the most.
In the digital universe space, 2021 was marked by the rise of non-fungible tokens (NFTs), meme coins and initial coin offerings (ICOs). Much of the buzz was around Metaverse in the latter end of 2021 as Facebook changed its name to ‘Meta’ and digitalization of multiple aspects became an A-list fad.
Ishan Arora, Partner, Tykhe Block Venture, which is a crypto hedge fund, said a few themes to watch out for in 2022 are Metaverse, Gaming and NFT. Tokens around these themes have already started gaining popularity towards the end of 2021.
Another important theme that emerged this year was potential ‘Ethereum Killers’, with multiple tokens including Solana, Cardano and Polkadot delivering hefty returns although they failed to dethrone the second-largest cryptocurrency.
According to blockchain mavericks, Ethereum has real-world utility. Its blockchain supports smart contracts that can be used in a wide range of applications, they believe.
Raj A Kapoor, Founder, India Blockchain Alliance, who sounds quite bullish on Ethereum, said it may overtake Bitcoin as the most valuable cryptocurrency sometime in 2022.
“Metavese will be another super strong theme due to traditional tech giants getting into it. Facebook’s name change, followed by a strong rise in crypto gaming will be noteworthy events,” he said.
Kapoor said one of the major bear cases against cryptocurrency is that it’s not accepted as a viable substitute for traditional currencies. “However, in 2022, we will see more and more businesses begin accepting cryptocurrency like Bitcoin as legal tender; both the viability and the value of cryptos will likely increase,” he added.
El Salvador, a small South American nation, designated Bitcoin as a legal tender in 2021. Market experts believe many other countries will either follow suit or create their own digital currencies.
There is no doubt that coins with no or limited utility are poised to lose the charm. And one such segment is meme coins, which are merely fun-oriented but those with some intrinsic value are poised to stay on the field for long, experts said.
Furthermore, investors should keep an eye on Decentralized Finance (DeFi) projects, which have a working product and revenue with a catalyst, they added.
According to Kapoor, Fetch.ai, a decentralized machine learning platform for applications like asset trading, could be a dark horse for the year.
“Last but not the least would be Layer 2 Zk rollups theme of projects that will deploy various L2’s on ETH. You could see more activities happening on L2’s on Eth than other L1 chains like Avax and Solana,” said Arora of Tykhe.
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