As we prepare for 2022, it’s useful to identify the most valuable investment narratives powering the crypto market. Humans see in stories, think in stories, and we invest in stories. Accordingly, the crypto market consists of numerous stories and narratives constantly in a battle for the outcomes of the future. This piece will attempt to identify the most valuable investment narratives for 2022.
Best Crypto Sectors for 2022
NFTs were a massive surprise mover in 2021. Looking at the data provided above from The Block you can see an explosion of volume flood into the NFT market in August ’21. Notably, basically all of this volume occurred on OpenSea.
NFTs were a relatively new idea in 2021. In 2021, most value inflow into NFTs came from speculative investors. Specifically, August looked like the top of a classic Gartner hype cycle. For NFTs to stay bullish in 2022 and continue to attract value, it would be nice to see NFT marketplace monthly volume hold $2 billion.
Furthermore, use-cases will likely be the key driver for successful NFT projects in 2022. While 2021 was the year of NFT speculation, its likely 2022 will be the year of NFT use-cases and interoperability with crypto-gaming.
Crypto Gaming & Metaverse Environments
Going along with this theme, it makes sense for crypto gaming, metaverse environments, and NFTs to grow synergistically throughout 2022. Specifically, in terms of crypto gaming there are literally hundreds of studios currently diligently at work developing crypto-native games.
In 2022 it is likely that metaverse projects will grow to create their own sector in the cryptocurrency economy. This is because metaverse environments do not follow the traditional concept of a ‘video-game’. Rather, the metaverse exists without any specific purpose – as in, it is made simply for players to exist in.
At the time of writing, The Sandbox (SAND) and Ultra (UOS) both rank over 70% on the Token Metrics Weekly Gaming Ratings. Furthermore, our analysts like Enjin Coin (ENJ), Render Token (RNDR), and Yield Guild Games (YGG) to take advantage of the upcoming growth of the crypto-gaming sector.
Ethereum Scaling Solutions and Layer-1 Alternatives
Polygon (MATIC), Terra Luna (LUNA), Solana (SOL), and Avalanche (AVAX) are currently the biggest winners in the scalability and layer-1 sector of the crypto market. Although Ethereum is a dominant network, there is still a highly competitive market for Ethereum alternatives to battle for users. Generally, layer-1 Ethereum alternatives compete based on technology.
Notably, Polygon is uniquely positioned to benefit from the growth of the Ethereum network and it can compete with the technology and scalability of alternative crypto networks. Due to this, Polygon (MATIC) is a consistent favorite among Token Metrics analysts.
From a macro perspective, holding Ethereum seems to be the best way to benefit from all of these narratives in 2022. However, if you want to outpace the growth of Eth, then we suggest looking for quality projects within the NFT, crypto gaming/ metaverse, and L1 sectors.