Cryptocurrencies were marked last year when they entered the investment mainstream.
However, analysts predict that this year could be even more interesting in the cryptocurrency market.
Almost every cryptocurrency, from Bitcoin to Dogecoin, has reached record values and made astonishing gains.
However, in May, about 50 percent of the total market value was wiped out in just seven days.
And in September, the Chinese government launched a real war against cryptocurrencies, which led to a ban on all transactions.
Other important cryptocurrencies from 2021 occurred when El Salvador made bitcoin a legal tender, numerous meme tokens exploded, and one NFT was sold for an incredible $69 million.
What will cryptocurrency markets bring us this year?
Arcane Research, a blockchain research company, has made dozens of crypto predictions for 2022.
Narrow correlation between Bitcoin and the S&P 500 index
Despite the threat of global economic recovery due to the growing number of coronavirus cases, both Bitcoin and the S&P 500 achieved impressive growth in 2021: Bitcoin jumped 66 percent and the S&P 500 rose about 27 percent.
However, given that Bitcoin has increasingly acted as a risky asset, Arcane Research predicts that it will further intensify significant stock market movements.
“Therefore, if the stock market continues to grow in 2022, Bitcoin will probably surpass it,” they predict.
“But if we see a red year for the stock market, Bitcoin is likely to fail.”
Ethereum will surpass Bitcoin again
Although it has long figured as the second violin, ETHER far surpassed Bitcoin in 2021, soaring 418 percent compared to “only” 66 percent of Bitcoin growth.
“This gap in performance has been the biggest since 2015 when Ethereum was launched,” Arcane said.
Among the reasons why Ethereum will continue to outperform in 2022 is the increase in NFT sales. Most of these tokens still run on the Ethereum blockchain.
Most meme coins will disappear
Investors have seen meme coins have huge oscillations in 2021.
For example, Shiba Inu rose by a staggering 44,540,000 percent last year.
And squid, a cryptocurrency named after the popular Netflix series “Squid Game”, jumped more than 75,000 percent in less than a week and soon disappeared.
“We can’t analyze the 2021 market without mentioning last year’s absurd mime coin,” says Arcane Research, adding that the phenomenon will be remembered as “a historical relic of the absurd times of 2021.”
The USD coin will surpass the Theter
Tether has been at the top for some time as the largest stablecoin in terms of market value. However, that may change this year, especially with the decision of the USD coin to join the wave of lending.
“Innovative lending products that pay high returns for stablecoin deposits have been primarily the drivers of stablecoin growth,” Arcane Research said.
Bitcoin will remain closely linked to the VIX
Stock markets were a stellar success last year, but one pattern crystallized, according to Arcane Research:
“Fear in broad financial markets has directly affected Bitcoin performance.”
The rise in the CBOE volatility index, or VIX(better known as the fear index), followed the Bitcoin sell-off.
Arcane Research warned that market winds this year could have implications for the short-term trajectory of Bitcoin prices.