Author: @Pathfinder0x18D
⚠️Disclaimer: Not Financial Advice || Do Your Own Research!⚠️
Historically, the digital asset space has been heavily correlated to Bitcoin (BTC). As we move into 2022, we’re seeing a digital asset ecosystem that’s much less correlated with Bitcoin than in the past. Previously when Bitcoin dumped or stagnated, altcoins faltered, often bleeding against $BTC and only appreciating in price with a stable or up-trending Bitcoin.
That has changed, with over half of the top 25 cryptocurrencies climbing in price in December despite a downward-trending Bitcoin. Multiple altcoins have been seemingly bear-market resistant; specifically Layer Ones (L1s), Layer Twos (L2s), and DeFi coins.
If you look at the total market cap growth of all cryptocurrencies over the last 6 months, it’s actually down from the peak in May, so it’s unlikely that crypto has experienced a net inflow of capital over the last six months.
2022 will be narrative-driven. Initially, capital will most likely be coming from institutional investors as the new year (and a fresh P&L) will allow for these investment managers to layer in risk-on assets (read: crypto). Capital will jump from narrative-to-narrative, leading towards more isolated pumps for the Top 10 digital assets and various higher-risk altcoins.
Here are some of the narratives that Pathfinder Capital is watching? We outline them below: