2022: Higher

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1. Market Movements

For 2021 cryptoasset markets massively outperformed other asset classes with Bitcoin (BTC) up a solid 60% and Ethereum (ETH) up a whopping 397% (Table 1).

Table 1: Price Performance: Bitcoin, Ethereum, Gold, US Equities, USD, Long-dated US Treasuries

Sources: Blockchain.com, Google Finance

On the year many cryptoassets were up a staggering 1,000%+, such as Dogecoin ($DOGE).

a select group up over 10,000%+ including Polygon (MATIC), Solana (SOL), Terra (LUNA), Axie Infinity (AXS) (Figure 1).

Figure 1: Select Cryptoasset Returns by Month and for 2021

Source: CoinMetrics

Traditional markets were mixed on the year: stocks were up +27% for 2021 while gold suffered a historic setback as a store of value, dropping 4% in a year with the highest inflation in 40 years. The all-mighty long dated US treasury bond market also suffered, down an even greater 6% on the year.

December did see market conditions soften in crypto, with declines for Bitcoin (BTC) down 19% and Ethereum (ETH) down 20%. Some may fear a loss of momentum as we enter a new year.

A counterweight to these concerns is the lack of a singular, frenzied “blow-off top” moment in 2021 and the resiliency crypto prices have shown following multiple setbacks last year.

Indeed, the failure of crypto prices to implode as they consistently have in the past following epic bull runs like 2021 are a sign, in our view, of how much crypto markets have matured since the last great blow-off top year-end finish in 2017.

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