CRYPTOCURRENCIES IN 2022
From cryptocurrency adoption outpacing the Internet, to sectors worth paying attention to Decentra University breaks it all down for you. Comparing the rise of the Internet to the adoption of cryptocurrencies.
The markets may be experiencing a volatile start to the year, but 2022 is gearing up to continue the adoption pace of crypto that 2021 set. Looking to the future, crypto is experiencing some exciting developments in the redefining of ownership and value transfer. With these advancements, specific sectors are catching the attention of investors with certain cryptos being in the centre spotlight.
Comparing the boom of the internet to the adoption of crypto
The adoption of cryptocurrency into everyday life isn’t a frightening or even unusual thing. Just look back at similar innovations in human history and you’ll see a pattern repeating. In fact, the adoption of crypto can be compared to one of the most groundbreaking innovations — the internet.
Cryptocurrency users are growing at a current rate of over 100% a year, this is well ahead of the adoption rate that the internet saw back in the 1990s and early 2000s. If this rate of adoption slows to 80%, cryptocurrency will still hit 1 billion users by 2024. That means 1 in every 8 people on this planet will be interacting or using crypto in some way or another.
With this in mind, it is predicted that this pattern will steadily continue into 2022.
Why the market has a volatile reputation
Humans, by nature, love getting caught up in the hype of a narrative. We see this in politics, personal views and society. The markets aren’t any different. In fact, it happens more so with a narrative, like crypto, that flips on a daily basis.
To get a more accurate representation of volatility, investors in crypto should rather take a longer-term view. Instead of looking at the daily flip-flop narratives, zooming out and getting the bigger picture offers a much more insightful representation of the market.
The bears vs the bulls: Who will win?
The adoption of crypto was everywhere in 2021. With institutional interest, the rise of the NFT market, and new retailer investors entering the scene, we’ve seen waves of fresh support spill into the cryptocurrency space. As much as we’d like it, the numbers simply can’t go up forever and there will always be pullbacks in a healthy market. But as cryptocurrency adoption increases, these cycles will extend past the current 4-year cycle to a more macro-economic cycle (10 years) and with that, the crypto market volatility will become less of an issue.
Cryptocurrency beyond payment; blockchain expansion in 2022
Cryptocurrencies are more than just a payment method, like PayPal or Visa, they present trustless, decentralised and immutable systems for transferring value.
Let’s break that down and look at the implications:
- Trustless – not relying on any third party to ensure the functionality of the protocol;
- Decentralised – having no central point of failure. I.e. not storing data on a single computer that could crash and bring the system down;
- Immutable – unable to be changed, no one person can alter the data.
Token doesn’t just mean money. Token can represent a multitude of things from a house to art to owning rights to something. Cryptocurrencies (as well as new concepts like NFTs) are bringing a different type of value to the world. Blockchain systems allow for this value to be transferred, stored and recorded on a verifiable ledger.
Blockchain technology and the value in true ownership
Outside of money, blockchain technology can revolutionise systems and improve efficiency across all industries. From internet solutions to gaming, digital documents to art; blockchains offer the potential to build, record and store assets in a decentralised way where peer-to-peer has the power and not intermediaries.
What this means:
Individuals have control of their crypto and full ownership of their blockchain-based assets. They don’t need to rely on banks, lawyers, or any other centralised entity to be a part of that ownership.
Furthermore, areas such as insurance, lending and borrowing, cloud storage, internet access, advertising, governance and healthcare are all using blockchain technology to advance their offering and make it accessible to the world. These systems are going to continually grow as the technology is used more widely. We’ll start seeing more and more opportunities emerge from functional blockchain technology beyond the financial capacity.
The big cryptocurrencies we should look out for in 2022
“When looking to the future of the market, it can be difficult to point out the exact cryptocurrencies that will take off and see tremendous growth. We can speculate based on trades and historical trends, but ultimately, I think investors should first focus more on sectors rather than individual cryptocurrencies. You need to identify if the problem these sectors are solving creates value,” says Brett Hope Robertson, Head of Investments at the cryptocurrency firm Revix.
This way it is easier to see which areas are of most interest to solving an issue and helping a market become more efficient. It puts functional use ahead of flash-in-the-pan investments and allows the market to develop around projects that are focusing on the use-case. Based on this, the sectors of interest this year lie within:
- Decentralised finance (DeFi) and platforms and projects in that space
- Gaming/Metaverse tokens
- Web 3.0
- The smart contract battle
- The smart contract battle is increasingly interesting and worth watching. Ethereum has grown by over 75% in the last year and is working to improve its protocol. As the mechanism upgrades, the network will see increased transaction speeds and reduced fees.
The much-anticipated improvements will very likely generate a fresh wave of increased attention to Ethereum. At the same time, other smart contract protocols like Solana, which experienced a massive +2,311% increase over the year, are highlighting how valuable these blockchains can be from both a functional point of view as well as an investment opportunity.
Trying to choose which cryptocurrency to invest in, whether smart contract or payments protocol, can be difficult. Luckily, it’s possible to invest in a diverse selection of top-performing cryptocurrencies without having to predict which one might be the best.
Cryptocurrency bundles such as the Top 10 Bundle, the Smart Contract Bundle, and the Payment Bundle offer a way to invest in the leading cryptocurrencies as a basket that is weighted and adjusted each month according to the top-performing cryptos. They’re a way to diversify your portfolio and enjoy passive investing without having to worry about active trading, volatility, and market watching.
As we can see, these Bundles have outperformed their sector counterparts while also producing a less volatile investment vehicle. This proves the true power of diversified bundles.
What are these Bundles made up of?
These bundles offers its customers access to 3 ready-made Crypto Bundles that hold the most reputable cryptocurrencies in each sector. These Bundles automatically rebalance every month to make sure your Bundle is up to date with the fast-changing world of cryptocurrencies.
The Top 10 Bundle is like the JSE Top40 or S&P 500 for crypto. It provides equally weighted exposure to the top 10 cryptocurrencies that make up more than 75% of the crypto market. This bundle has significantly outperformed Bitcoin over the last 12 months.
The Smart Contract Bundle provides equally weighted exposure to the top five smart contract-focused cryptocurrencies such as Ethereum, Solana and Polkadot. These cryptocurrencies allow developers to build applications on top of their blockchains, similar to how Apple builds apps on top of its iOS operating system.
The Payment Bundle provides equally weighted exposure to the top five payment-focused cryptocurrencies looking to make payments cheaper, faster and more global. These cryptos include the likes of Bitcoin, Ripple, Stellar and Litecoin.