Analysts at Arcane Research believe that one of the strongest crypto narratives over the next twelve months will be the performance of the so-called “ETH killers”.
They also predict that Bitcoin will outperform the S&P 500
Crypto research platform Arcane Research says 2022 will see Layer 1 platforms continue to outperform Ethereum, based on crypto market analysis and other developments within the space crypto in 2021.
Along with its predictions for Layers 1 against Ethereum, the company’s 2021 final report cited Bitcoin against the S&P 500, DeFi, the NFT market, the outlook for Cardano and XRP, the coin mania as exacerbated by the “dog coin wars”, and derivatives.
Prediction 2022: Layers 1 will surpass ETH
In one report published Dec. 28 via The Weekly Update from blockchain data analytics and research firm Solana, Avalanche, Terra Luna and Fantom are all set for further earnings over the next year, with tokens native to these networks of autonomous smart contracts continuing to overtake ETH in the market.
The company says it expects Solana and the other top performing Layer 1 networks to maintain the uptrend over the next year, with price hikes supported by increased usage and entries of capital.
“These networks have thriving and rapidly growing ecosystems that continuously drive the price performance of their native tokens.“the firm noted in the report.
A look at the individual returns for some of the smart contract platforms that are expected to continue to overtake ETH, we see that Terra Luna (LUNA) is up 14.823% in 2021, with Fantom (FTM) and Solana (SOL) seeing both 100x or more in price growth at 13.549% and 10.907% respectively.
While Ethereum’s native Ether coin (ETH) jumped 460% in 2021 to overtake Bitcoin (BTC) by 73%, the smart contract platforms Harmony (ONE) and Avalanche (AVAX) returned 60 times to the during the year. Harmony is expected to close the year with price gains of over 6400% for the year and Avalanche is up over 3150%.
On Bitcoin vs S&P 500 and Gold
Bitcoin is up around 73% during the year, while the S&P 500 also edged up to record closings as it expects a 28% return for the calendar year. Meanwhile, gold, despite being the traditional hedge against inflation, has negative returns at -7% in one year, inflation rhetoric has dominated sentiment.
Arcane Research claims that Bitcoin will always beat both the S&P 500 and gold, having succeeded this year to record a third consecutive year of outperformance against the stock market and the safe haven asset.
#Bitcoins beats both the stock market and gold for the third year in a row.
Will be #Bitcoins beat the stock market and gold next year too?
Extract from our weekly market report: https://t.co/1BRmx043AV pic.twitter.com/Qe5gHnia6i
– Arcane Research (@ArcaneResearch) December 29, 2021
But the researchers also note that “Bitcoin has increasingly behaved as a risky asset, rather than the digital gold that it’s been labeled to be.
This means that investors might therefore want to monitor the performance of the stock market. The bullish momentum in stocks could also see the price of BTC outperform, while a “red year” for the S&P 500 will see the cryptocurrency underperform, analysts wrote.
On altseason, NFT and metaverse
While Bitcoin’s run in 2021 has been astonishing, the bespoke research firm claims the year was roughly in altcoins.
They note in their report summarizing the year in crypto that it “has been a boom year for most altcoins”, with capital inflows into the segment contributing to the decline in Bitcoin’s dominance in the first half of the year.
As previously reported, ETH has outperformed BTC just like most other altcoins. For example, Binance Coin (BNB) gained over 1340% over the year to see it beat both Bitcoin and Ethereum in the top three in terms of market cap.
The company is also bullish on NFTs and the Metaverse, noting that both narratives dominated market engagements in 2021. However, they say it was the “NFT craze” that drove up gas costs on the Ethereum network, with the feedback being of increased interest in Layer 1 tokens.