🧘‍♂️ALERT: Future of Crypto

Market Meditations | January 4, 2022

2021 Review & 2022 Outlook

Dear Meditators

A new year comes with new opportunities, let’s take a look at them. 

Today’s Meditations: 

  • Future of Crypto. A summary of QCP Capital’s recent report. 

  • Cosmos Puzzle. Test your knowledge. 

  • Samsung x NFT Trees. The evolution of technology.

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Our Market Meditations are longer format educational segments. Each letter features a Market Meditation which will deep dive and analyse a relevant crypto event, theme or tool. 

? Future of Crypto

QCP Capital recently published their ‘Just Crypto’ 2021 Review & 2022 Outlook. Today’s Market Meditations provides a summary of their publication.

Overview of 2021

  • 2021 took off like a rocket with massive inflows in Q1 sending crypto prices to new highs and derivatives markets into a record-breaking frenzy. 

  • This frenzy in crypto came to an abrupt halt as prices crashed in May led by the double whammy of a record high US CPI print and Elon’s tweet over Tesla’s BTC ESG concerns.

  • BTC eventually saw a 55% drawdown from the highs in just over a month. 

  • July through to November we saw institutions warming up to BTC again.

  • Since then the market has remained capped by inflationary and central bank tightening fears and the emergence of new Covid-19 strains.

Key Observations from 2021

The term ‘Unicorn’ has become popular, with an unprecedented number of crypto companies / projects achieving multi-billion dollar valuations in 2021. 

TIP: Take note of the unprecedented rate of growth in valuations. A sensible investor might ask whether markets are overheated. For more about this and how to position yourself for the current market conditions, check out our podcast with Ryan Selkis.

The DeFi/NFT boom earlier in the year initially drove ETH network congestion to unsustainable levels. In 2H21, the second leg of growth was spread across other Layer 1s, leading to a more balanced and robust multi-chain ecosystem.

2022 Theses 

  • Institutionalisation. The first thesis is a major flippening of crypto ownership from primarily retail to institutional players, with institutions having a much larger participation. Which would naturally lead the more sophisticated institutions to the active BTC/ETH options market – a space major investment banks are now keenly eyeing.

  • Layer 1s. BTC Underperformance versus other Layer 1s. 

  • NFT/DeFi Boom and Bust. 2020s will be known as the decade of financial market reinvention and disintermediation primarily through DeFi and NFTs. This is after a widespread consolidation in these sectors weed out 90% of copycat projects and funnels capital to the standout ones. 

  • Metaverse. Metaverse and VR igniting the wearables tech space as the iPhone did in 2007 for the current smartphone revolution.

No one report can accurately predict what will happen in the future or definitively explain past events. However, if we continue to review some of the best resources out there, we might find our opinions and insights become better informed. Look out for more summaries of research reports from Market Meditations.

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? Biological Exchange

Which biologically named exchange has just crossed $1 billion in locked value?

  1. Diffusion

  2. Osmosis

  3. Active Transport

? NFTrees

One of the dilemmas large tech companies face is how to embrace blockchain while doing their part to fight climate change

Samsung is one example of a corporate giant trying to find its way in this new wilderness:

  • Samsung revealed yesterday that this year’s Smart TVs will come with an NFT platform, allowing users to find, buy, trade and showcase digital collectibles

  • The platform will link to a range of marketplaces and let customers preview the art and blockchain metadata

  • The television sets include calibration technology that adjust the settings to match those specified by the original creator

  • In a seemingly unrelated move, Samsung also announced yesterday their intention to plant mangroves in Madagascar to help offset their carbon emissions.

  • However, they are partnering with Veritree, a blockchain technology company that helps track and account for every tree that is planted (‘Proof of Tree’, if you like).

  • Both of these announcements follow Samsung’s foray into crypto last year when they introduced a blockchain wallet for cryptocurrencies on Galaxy devices

Another feature of the new smart TVs will be the Samsung Gaming Hub, a platform that will facilitate streaming of games

This could be another sign that large tech corporations are becoming more comfortable with a blockchain future, where huge market reach coupled with NFTs and gaming helps drive mass adoption.

2. Osmosis 

Osmosis is the first decentralised exchange on the Cosmos network which hit $1 billion in total locked value on Monday night.

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??‍♂️✍️ Stories in this newsletter were written by Isambard FA, Nick T., Max P., Kimia K., Ellen B. and Koroush AK. Graphics were produced by Gerasimos P.

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