It’s been largely an exciting year for the crypto space except that we are still missing the Santa Rally (fingers crossed).
Crypto analyst Lark Davis explains some of the important shifts that will define the bull run in 2022.
Bitcoin (BTC) investors have been caught up in the recent price volatility while awaiting the Santa rally which looks difficult with the recent trend. Bitcoin (BTC) is currently facing stiff resistance in its attempt to climb above $50,000. However, market analysts still remain positive as we head into 2022.
Popular crypto analyst and investor Lark Davis gives his eight big Bitcoin and crypto predictions for 2022. So if you’re at all considering dipping your toes in the crypto space at this point, these indicators will help.
1. The U.S. will approve a spot Bitcoin ETF
The U.S. Securities and Exchange Commission (SEC) is somewhat getting accustomed to having crypto products in a regulated marketplace. Although the U.S. SEC approved a futures ETF, the demand for a Bitcoin spot ETF remains high. Some of the most influential companies like Fidelity Investments are rushing to bring the spot Bitcoin ETF into the market.
Thus, Lark Davis believes that a Bitcoin spot ETF is coming in the U.S. in 2020. Why it’s a big deal? Well, the U.S. alone accounts for a staggering 50 percent of the global equity markets. Just imaging the liquidity that will flow into Bitcoin following the approval of a Bitcoin spot ETF in the U.S.
2. Major central banks will add Bitcoin to their balance sheet
This is another big and bold prediction from the crypto analyst. Latin American country El Salvador was the first in the world to make Bitcoin a legal tender this year. Central banks of some other countries like Iran and Venezuela are also holding Bitcoin on their balance sheet.
Moreover, sovereign wealth funds of countries like Singapore and the UAE are already testing waters with Bitcoin investments. Lark Davis expects that some other big economies and their central banks will also adopt Bitcoin. He expects central banks in some of the crypto-friendly jurisdictions like Russia, Switzerland and France to do it.
3. Another country will make Bitcoin a legal tender
Following El Salvador’s footsteps, there’s will another country that can legalize Bitcoin as a legal tender, believes Lark Davis. To name some of the strong candidates in this space, Davis names Ukraine which has been crypto-friendly as well as Pana which has been a “slave” to the U.S. Dollar and thus would consider onboarding Bitcoin.
There have been other countries like Tonga which have been screwed by these remittance companies. Thus, it would be a great candidate for making Bitcoin a legal tender as per Davis. Well, it’s difficult to actually predict which country will have BTC, but there’s surely one country adding to the list in 2022, says Davis.
4. Ethereum’s DeFi TVL domination to drop below 50%
In a bold prediction, the crypto analyst believes that Ethereum’s domination in decentralized finance (DeFi) will further drop in 2022. From last year to the current year, Ethereum DeFi TVL domination has dropped from 97 percent to 66 percent. However, the absolute value locked in terms of DeFi TVL has increased.
Furthermore, owing to the high gas fee, other Layer-1 and Ethereum Layer-2 solutions have been gaining prominence. Davis believes that more and more DeFi players will move to Ethereum-competitors like Binance Smart Chain (BSC), Solana (SOL), avalanche (AVAX), Polygon (MATIC). Thus, he believes that Ethereum’s DeFi TVL will drop under 50 percent as the dominance of other competitors will grow.
BUT, what if Ethereum developers succeed in launching the PoS Etheruem 2.0 that provides high scalability and low gas fee. Note that Ethereum still commands high trust levels among other competitors. In this case, DeFi protocols might reconsider their decision of moving to other platforms.
5. XRP will win its Court case against the SEC
It has been pretty much close to a year since the U.S. SEC slapped a lawsuit on XRP’s parent firm Ripple for alleged selling of XRP tokens as securities without registering with the U.S. SEC. After multiple court trials over the last year, the case is likely to come to its conclusion in 2022.
Davis believes that Ripple is all set to win the XRP case and that the SEC’s bullying won’t work. If Ripple manages to successfully win the court case, it will set up major precedence in the crypto space. It will also instill confidence among other crypto firms to deal with regulatory matters.
6. Big tech firms will add Bitcoin to their balance sheets
In 2021, Tesla became the first major company to add Bitcoin to its balance sheet earlier in February. Davis expects the trend to accelerate further going into 2022.
Davis is quite bullish that social media giant Facebook, now Meta, will buy Bitcoin in the next year. Facebook is sitting on strong cash reserves of a staggering $60 billion. Looking at the rate at which inflation is surging, keeping this cash at hand wouldn’t be a wise option. Davis believes that the wise decision would be putting some portion into BTC.
Furthermore, the crypto analyst believes that Facebook will enable Bitcoin trading in its Novi wallet. It has already started facilitating stablecoin transfers in the U.S.
7. The end of the dog meme coins
Dog meme coins registered a frenzy bull run this year in 2021. Dogecoin (DOGE), Shiba Inu (SHIB), Floki Inu, all had a wonderful bull run. This is likely to end in the upcoming year says Lark Davis. Lark Davis says that Cat meme coins will take over the trend in the upcoming year.
8. Crypto market cap will hit $10 trillion in 2022
Lark Davis stays bullish on the broader crypto market and expects the market to quadruple from the current levels. He says that massive institutional and retail money will pour into the crypto space in 2022 with the market cap crossing $10 trillion. Might sound too good to be real at this point, but it’s possible believes Davis.
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