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Crypto Outlook Snippets 2022 What's moving the EC10 index?

2021 turned out to be a stellar year for crypto. While 2022 will most likely look very different because of changes in the global macro economic environment and where we are in the tech adoption cycle-there is still a lot to be excited about.

Here are 10 major themes in crypto that will move the EC10 index in 2022.

An end to cheap money(Bearish)🐻

The Crypto market capitalization was $800 billion a year ago & is pushing $2.2 trillion today. A larger and deeper market means 1) lower volatility, 2) same inflow of new investment has less impact on crypto prices.

That combined with tighter monetary conditions(tapering and rising interest rates), means another 200% return for 2022 is probably unlikely🤔?

Growth of DeFi(Bullish) 🐂

Total value locked in DeFi applications hit $300 Billion in 2021. This sets the stage to continue this exponential growth into 2022. DeFi will undoubtedly become a serious contender against traditional finance.

NFT popularity(Bullish) 🐂

The value of NFT sales was over $21 Billion in 2021. While proving a contentious topic on social media, NFTs continue to grow along with NFT platforms that continue to break records in terms of user growth and value traded. NFTs predominantly run on Ethereum and Binance Smart Chain, both ETH and BNB are in the EC10 index.

GameFi adoption(Bullish) 🐂

Play-to-earn (P2E) style games, also commonly called “GameFi,” which have become popularized by the huge success of the blockchain-based game Axie Infinity, continue to grab attention. The crypto hype has drawn in millions of players and established traditional game makers have expressed serious interest in GameFi development. There will undoubtedly be continued building on the success of titles like Axie Infinity with its millions of users.

Blockchain scaling(Bullish) 🐂

Hopefully we see progress made in ETH2.0 and the growth of “ETH killers” or competitors to take blockchain tech to new growth heights. Mass adoption of Web3 arguably hinges on scalable public blockchains. Whatever the solution, the EC10 index will hold the chain and will reap the benefits.

Metaverse growth(Bullish) 🐂

Facebook literally changed its name to Meta. The tech industry is extremely excited about the “metaverse”. We are still early in the adoption of this tech, though excitement is building. From buying digital real estate to attending concerts via virtual reality, crypto and tokenization in this sector seems promising.

Regulatory clarity(Neutral)🦌

Though a Bitcoin spot ETF in the US is looking increasingly unlikely in 2022 it is still on the table as a US futures based ETF launch was successful and the crypto industry continues to gain acceptance and cleans itself up. It is widely believed that an ETH futures based ETF will be given the green light, but also a no for its spot counterpart. US stablecoin regulation is on the way already, whether by enforcement action or continued discussion with regulators and legislators, a regulated stablecoin market would basically mean a huge infusion of US dollar backed liquidity, very bullish for crypto prices. The Ripple/XRP court case most likely comes to a close, its outcome will affect the crypto industry as a whole by setting precedents- can be good or bad for crypto.

Institutional adoption(Neutral)🦌

After the bitcoin highs reached in 2020, numerous companies went into 2021 by putting BTC on their balance sheets. From Nasdaq-listed Marathon Patent Group to Square and of course Elon Musk and Tesla, with the 1st prize going to Michael Saylor’s Microstrategy, holding a whopping 124000+ BTC at the end of the year. While this trend has slowed, corporates are getting involved in crypto to take advantage of technology like NFTs or the Metaverse, investment is sure to pick up once they are more comfortable in the space. And maybe other crypto to their balance sheets?

Continued stablecoin growth(Bullish) 🐂

Since the beginning of 2021 according to The Block “aggregate stablecoin supply has grown by 388% — from $29 billion to over $140 billion, a record high.”

Stablecoins have become an increasingly critical part of the crypto space. This massive growth is showing no signs of slowing down. Much of these stablecoins find themselves locked into borrowing, lending, and trading in DeFi. While the EC10 does not hold stablecoins, their use in the crypto market is critical and is bullish for the assets that make up the index.

“Bitcoin as a currency” adoption(Bullish) 🐂

El Salvador became the first country in 2021 to adopt bitcoin, officially making Bitcoin legal tender. The investment firm Fidelity reported that it believed a high stakes game theory is currently being played out that would leave early adopters of the cryptocurrency better off than their peers.

"We therefore wouldn't be surprised to see other sovereign nation states acquire bitcoin in 2022 and perhaps even see a central bank make an acquisition," Fidelity concluded. Bitcoin is still the largest holding in the EC10 index.


Fun fact: The EC10 index outperformed Bitcoin by 63% in 2021

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Jonathan Marais