The 5 best crypto predictions for 2022 | Currency News | Financial and business news

It has been a banner year for digital assets in 2021, and the new year should see cryptocurrencies reach new milestones.

Crypto investors have taken another roller coaster ride in 2021. Almost every cryptocurrency, from bitcoin to dogecoin, has reached record highs and generated mind-blowing gains. But in May, about 50% of the total market value was wiped out in just seven days. And in September, China’s crackdown on crypto turned into a ban on all transactions.

Other wild crypto moments of 2021 came when El Salvador made bitcoin legal tender, even tokens exploded, and an NFT sold for $ 69 million.

So what does 2022 have in store? Arcane research, a blockchain research company, has made dozens of crypto predictions for 2022. Here are five:

Bitcoin will outperform or underperform the S&P 500

Despite the threat to the global economic recovery from increasing coronavirus cases, bitcoin and the benchmark recorded impressive gains in 2021: Bitcoin jumped 66% and the S&P 500 rose by roughly 27%.

But as bitcoin has behaved more and more as a risky asset, Arcane Research said it will further amplify large movements in the stock market.

“Therefore, if the stock market continues to rise in 2022, bitcoin will likely outperform,” the company said. “But if we see a red year for the stock market, bitcoin will likely be underperforming.”

Ether will surpass bitcoin again

Long considered a second violin, ether far outperformed bitcoin in 2021, gaining 418% versus 66% for bitcoin.

“This performance gap is the biggest since 2015 when Ethereum launched,” Arcane said.

One of the reasons Ether will continue to outperform in 2022 is the increase in sales volumes of NFT. Most of these tokens are still running on the ethereum blockchain. And major upgrades this year, from the Berlin update to the London hard fork, have helped improve the network’s ability to handle more transactions.

Ethereum's performance in 2021
Ethereum’s performance in 2021

Most even pieces will fade in the dark

Investors have seen meme coins appear left and right in 2021. For example, the dogecoin spin-off shiba inu climbed 44,540,000% last year. And the squid, a crypto named after the popular Netflix series “Squid Game,” jumped over 75,000% in less than a week only to fade into oblivion soon after.

“We cannot sum up the 2021 market without mentioning the absurd meme coin rally of 2021,” Arcane Research said, adding that the phenomenon would be “a historical relic of the absurd times of 2021”.

USD Coin to overtake Tether as biggest stablecoin

Tether reigned supreme for a time as the largest stable coin by market valuation. But he might want to be careful this year, especially with USD Coin’s decision to join the lending wave.

“Innovative lending products offering high yields for stablecoin deposits have primarily been the drivers of stablecoin growth,” Arcane Research said.

Bitcoin will remain closely tied to the VIX

The stock market experienced a meteoric rise last year, but a trend crystallized, according to Arcane Research: “Fear in the broader financial markets has directly affected bitcoin’s performance.”

Spikes in the Cboe volatility index, or VIX, accompanied the massive bitcoin sales. Arcane Research has warned that market headwinds in 2022 could have implications for the short-term price path of bitcoin.

Bitcoin vs. VIX
Bitcoin vs. VIX

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