Welcome to part 2 of Coinsource’s look into crypto for 2022, where we take a look at various aspects of crypto and hear from Coinsource leadership about the upcoming year. If you haven’t already, make sure to check out part 1 of this series.
2022 has arrived and is in full motion! Give me a short, mid, and long-term outlook you have as we head into the new year.
Looking long term, a lot of the projections say that prices will continue to go up across the industry. I think that regulation is going to play an important part, especially when talking about “stable coins”, and whether or not the SEC will be able to regulate these coins separately from the rest [of the market].
Switching to the short term, I’m looking for: (1) what other institutional investors will join the market, (2) what other ways will mainstream adoption become more available, and (3) how will banks step in to support crypto products/assets.
I think there are two things to look at. First off, we need to understand that we have some of the smartest people in the world working in the crypto-space and we continue to absorb the smartest engineers and the smartest product people. Some of the best entrepreneurs in the world are coming into this space. The technology in this space is going to grow faster than in any other industry, in my opinion, and a lot of that started early-on in 2021. But it takes a very long time to get scalable products out. I think we’ll really start to see the fruits of that labor coming out in 2022.
Secondly, with corporate treasuries putting Bitcoin on their balance sheet(s), I firmly believe that this served as the tipping point for Bitcoin. We’re going to start seeing less volatility. there’s still going to be a ton of high volatility with higher risk assets, but with Bitcoin we’re not going to see 80% drawdowns. We’re going to continue to see volatility but it’s going to be a lot more choppy along the way where we rally for 3-4 months, things get overheated, and then we come down for a few months.
In the short term I’m expecting to see DAOs (decentralized autonomous organizations) to be recognized – by the mainstream – as LLC alternatives. NFTs will become a critical product offering for all corporations as a method of User acquisition & Retention (go see what Nike is doing and Adidas. Or better yet just google: Metaverse). This said, automation will drive organizations. Smart Contracts will be widely adopted as a method of expediting contract formation, signing, execution, and settlement.
During the mid-term, we’ll see Traditional organizational structures begin to adopt hybrid infrastructure. We will also begin to see a shift from hierarchical organizations to more flat, decentralized organizations (e.g. DAO-hybrids). Social Tokens will become integral for virtually any & all web-intensive organization(s). Web3 compatibility/adoption will be imperative for the growth & continuity of all businesses worldwide.
Lastly, in the long term, I foresee the crypto market becoming a $100 Trillion asset class. In my opinion this estimate is not far-fetched at all. All forms of money will officially transition over to, and be compatible with, Web3 wallets. Furthermore, Play-To-Earn models will be successfully integrated in AAA rated games (check out Ubisoft Quartz). From a network standpoint, zkRollups will become the most utilized and secure L2 (layer-2) option for daily transactions.
We will see a blow off top of Bitcoin mid 2022. There is a lot of upward momentum until then, which we will likely see early 2022. Bitcoin will correct materially less than other coins and will recover leading into another bullish phase. There is a lot of room to come closer to traditional markets, which are usually ⅓ bear and ⅔ bull markets, where it is yet the opposite. We will compare more to traditional markets from 2022 onwards.
What are the three most important pieces of advice you would give to “new adopters” for 2022?
Great question! Well first, try to learn a little bit about the technology. You don’t have to be an expert and you don’t have to understand different layers of blockchain, but having a basic knowledge of how the technology component of cryptocurrency works and how it’s stored will go a long way. At a base level, all of these things are incredibly beneficial towards making educated and well-informed investment decisions.
I would advise any & all new adopters to always have a plan of action. Ask yourself: why am I buying cryptocurrency? Have an answer, and a plan, for why while having a well thought out strategy for trading & usage.
Last, but not least, don’t overextend. The rule of thumb is to never give up what you couldn’t live without if you were to lose it all.
Instead of 3 I’ll give you about 7:
- Get in by buying some Bitcoin that you’re comfortable sitting on for 5+ years.
- Don’t overextend yourself
- Look at it as a savings account and a store of value for 5+ years.
- Don’t use leverage.
- Don’t go too far down the rabbithole for some of these altcoins that are saying they’ll generate massive returns. There’s a lot more risk that comes with that.
- It’s fine to test out other assets but just know that they come with risk.
- Get educated. Learn as much as humanly possible!
The following pieces of advice are the exact same principles I still adhere to today:
- DYOR (do your own research)
- Have conviction
- Never time the market
- Have a long-term time horizon (5+ years)
- Dollar-cost-average and be consistent.
- Get a well-rounded understanding of Compounding.
The best you can do is plan for the long-term – then very little can go wrong. Do not buy for the 20% gain. Buy Bitcoin with a 10 year horizon.
More Questions Coming Soon!
Stay tuned for part 3 of our look into crypto, with many more questions and answers to come!
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