Predictions for Crypto in 2022

2021 has been the cryptocurrency industry’s biggest year ever. And that’s not just because token prices went up, which some did by thousands of percentage points, proving that epic crypto gains are still very much on the table. More importantly, crypto growth this year came in the form of major adoption, integration and innovation, such as El Salvador’s bitcoin policy and the embrace of NFTs by major brands and mainstream celebrities.

So what happens after the biggest year ever? Probably a not-as-big year.

This past year was unique, above all because the day-trading momentum that broke out during 2020 COVID lockdowns was carried forward into real adoption and innovation by the likes of Twitter. And crypto is generally highly cyclical, as new converts get overextended and burned, then retreat to lick their wounds and do some learning before they dive back in. 2021 already broke crypto’s formerly clockwork boom-and-bust rhythm, though, so anything is possible.

Even if it is less spectacular than 2021, 2022 will see major moves, such as the launch of Ethereum 2.0 (finally!) and a retreat of NFT-mania (probably!). And given the maturing of the industry, there will be plenty of capital to fund the continued building of interesting projects and plenty of opportunities to get involved if you’re paying attention. There are also major real-world factors that will affect crypto, from U.S. interest rates to inflation to COVID variants — some more predictable than others.

What follows is a mix of my own impressions of what’s coming, and the (usually far superior) insights of other crypto observers. None of it is financial advice, and most of it is probably wrong — but I hope it will help you form your own picture of the road ahead.

The overall token market flattens.

Expect at least a period of unstable and essentially flat token markets. I’m increasingly convinced we won’t see a 2018-style massive drawdown, but 2021 was such a huge year that a reversion to the mean is likely in strictly mathematical terms. I do think there’s a good possibility bitcoin sets a new all-time high above $69,000 by the end of 2022, though I wouldn’t bet on that being sustainable until 2023.

In fairness, I was far too bearish last time around — I thought we’d see a top at around $30,000 back in 2020, but that turned out to be anything but just another cycle. Momentum could very well pick back up, so consider this a projection lightly held.

Elon Musk will continue misleading and confusing people new to crypto.

By the end of 2022, once he’s caught up to the fact that it’s not Nick Szabo, Elon will claim to be Satoshi despite not “getting” proof-of-work (PoW). Craig Wright will sue him for defamation, and much hilarity will ensue.

NFTs keep tanking.

This one’s a bit of a layup since many formerly high-dollar non-fungible tokens are already bleeding, and a lot of those prices were likely manufactured via wash trading in the first place, so they have further to fall. I see the market for “profile pic” and celebrity-branded NFTs in particular coming way back down to earth, since a lot of their price action over the last 18 months has been based on the misperception that they’re “art” and will trade like a Basquiat or Van Gogh.

They’re not, and they won’t. For more insight into what actually makes real art valuable, as an NFT or in other forms, review my pieces on the art market and generative art.

2021 has been the cryptocurrency industry’s biggest year ever. And that’s not just because token prices went up, which some did by thousands of percentage points, proving that epic crypto gains are still very much on the table. More importantly, crypto growth this year came in the form of major adoption, integration and innovation, such as El Salvador’s bitcoin policy and the embrace of NFTs by major brands and mainstream celebrities.

So what happens after the biggest year ever? Probably a not-as-big year.

This past year was unique, above all because the day-trading momentum that broke out during 2020 COVID lockdowns was carried forward into real adoption and innovation by the likes of Twitter. And crypto is generally highly cyclical, as new converts get overextended and burned, then retreat to lick their wounds and do some learning before they dive back in. 2021 already broke crypto’s formerly clockwork boom-and-bust rhythm, though, so anything is possible.

Even if it is less spectacular than 2021, 2022 will see major moves, such as the launch of Ethereum 2.0 (finally!) and a retreat of NFT-mania (probably!). And given the maturing of the industry, there will be plenty of capital to fund the continued building of interesting projects and plenty of opportunities to get involved if you’re paying attention. There are also major real-world factors that will affect crypto, from U.S. interest rates to inflation to COVID variants — some more predictable than others.

What follows is a mix of my own impressions of what’s coming, and the (usually far superior) insights of other crypto observers. None of it is financial advice, and most of it is probably wrong — but I hope it will help you form your own picture of the road ahead.

The overall token market flattens.

Expect at least a period of unstable and essentially flat token markets. I’m increasingly convinced we won’t see a 2018-style massive drawdown, but 2021 was such a huge year that a reversion to the mean is likely in strictly mathematical terms. I do think there’s a good possibility bitcoin sets a new all-time high above $69,000 by the end of 2022, though I wouldn’t bet on that being sustainable until 2023.

In fairness, I was far too bearish last time around — I thought we’d see a top at around $30,000 back in 2020, but that turned out to be anything but just another cycle. Momentum could very well pick back up, so consider this a projection lightly held.

Elon Musk will continue misleading and confusing people new to crypto.

By the end of 2022, once he’s caught up to the fact that it’s not Nick Szabo, Elon will claim to be Satoshi despite not “getting” proof-of-work (PoW). Craig Wright will sue him for defamation, and much hilarity will ensue.

NFTs keep tanking.

This one’s a bit of a layup since many formerly high-dollar non-fungible tokens are already bleeding, and a lot of those prices were likely manufactured via wash trading in the first place, so they have further to fall. I see the market for “profile pic” and celebrity-branded NFTs in particular coming way back down to earth, since a lot of their price action over the last 18 months has been based on the misperception that they’re “art” and will trade like a Basquiat or Van Gogh.

They’re not, and they won’t. For more insight into what actually makes real art valuable, as an NFT or in other forms, review my pieces on the art market and generative art.