In the weekly update from Arcane Research, the company indicated that Ethereum will face a lot of competition in the coming year. It also delved deeper into what will happen to meme cryptocurrencies and the NFT market.
The Weekly Update predicts that the number two cryptocurrency, Ethereum (ETH), will outperform the number one cryptocurrency, Bitcoin (BTC), in terms of price performance. However, it added that it doesn’t expect the so-called flippening to happen next year yet. It indicated the following:
“ETH will continue to outperform BTC, but we won’t see ETH’s market cap surpass BTC’s.”
However, the report went on to say that the leading smart contract platform will face stiff competition. This is how Solana performed (SOL), Avalanche (AVAX), Terra (LUNA), Fantom (FTM) and Harmony (ONE) have already outperformed ETH in terms of ROI over the past year, with LUNA, achieving the highest return of 14.823%, compared to Ethereum’s 455% rise.
It also indicated that Binance Coin (BNB) the top performer was among the top 3 cryptocurrencies, up 1344%. It said the following about this:
Bitcoin may have beaten the stock market in 2021, but it has been left in the dust by other cryptocurrencies. Binance Coin (BNB) is the best performing of the three largest cryptocurrencies by market capitalization, with a gain of 1344%.
The Binance Smart Chain ecosystem has experienced massive growth in 2021, taking some of Ethereum’s market share away. While Ethereum has lost its undisputed position as the “only” smart contract platform, ETH also crushed BTC in 2021 with a gain of 455%.”
The report indicated that the smaller layer-1’s native tokens will outperform ETH next year as user adoption and fund inflows continue to increase and the prices of these coins drive up.
“The adoption of layer-1s other than Ethereum will continue to increase and they will continue to outperform ETH.”
As for meme cryptocurrencies, like the dog-themed tokens Dogecoin (DOGE) en Shiba Inu (SHIB), the company predicted that the majority of these tokens will eventually crash after their massive rally in 2021:
“Most memecoins will be forgotten as they are a historical relic of the absurd times of 2021.”
Concerning the NFT market, it indicated last year was a breakthrough year for the nascent market. For example, in March, Beeple’s “Everydays: the First 5000 Days” was sold at a Christie’s auction for a whopping $69.3 million, making it the eighth most expensive artwork sold in 2021. Also, mainstream companies such as Ubisoft, Nike, Adidas and Visa are all trying to enter the market. This, according to Arcane Research, will not decrease next year:
“Forecast 2022: Traditional game companies will continue to explore ways to implement NFTs in the games.”
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