SM (ed.18) 2021 Review & 2022 Outlook

SM (ed.18) 2021 Review & 2022 Outlook

January 02, 2022

Friends and associates,

2021, what a year! There is lots to be grateful for, in life, work and markets. Lots of lessons learnt too.In the past week I took time to reflect on last years predictions, digest the learnings and contextualize where we are ahead of what will likely be another whirlwind year. Forecasts can be foolhardy because some of them will inevitably be wrong and if you get too precise you end up tying yourself up in knots. But they are a useful tool to sharpen the mind, record the current state of the crypto markets, provide a vision of the future and create signposts to assess that future.So, here goes.

TLDR: I think the market structure has changed and do not think we will experience the typical 4-year protracted bear market. Fed tightening could create a tougher year for crypto but capital deployment will still result in bright sparks as numerous new entities are compelled to turn towards this powerful decentralized technology. I will be watching the Fed, the SEC and US stablecoin regulation very closely to assess if we out or underperform these expectations.

Summary and Predictions

  1. Market structure has changed

  2. Historical 4-year bull & bear cycles are dead

  3. More short-term volatility and less long-term volatility

  4. Extended bear market unlikely but 2022 presents serious macro challenges

  5. Consolidation and outperformance of BTC and ETH

  6. Securities scrutiny places smaller crypto projects under pressure

  7. Limited El Salvador followers

  8. 'Rogue states' stealth bitcoin accumulation

  9. US government legitimizes stablecoins

  10. Politicization of bitcoin

I hope you had a restful time with family and friends over the holidays. I was reluctantly forced into covid-induced rest and am very grateful for that opportunity to collect myself. This passage from David Whyte gave me comfort, "To rest is to prepare to give the best of ourselves... To arrive at a place where we are able to understand what we have already been given... Rested we are ready for the world, but not held hostage by it."Wishing you a successful 2022, filled with courage, generosity and meaningful outcomes.