As Q1 2022 comes closer to an end, let’s take a step back to cover some of the over-arching narratives that could drive Bitcoin and Ethereum higher in the 2022 bull run. Covered: Current State Of The Market Bitcoin’s Dominant Narrative Ethereum’s Bull Fuel For This Year Current State Of The Market In Limbo pic.twitter.com/fr8sVFb1KA […] The post Bitcoin, Ethereum: Key Narratives To Watch In 2022 appeared first on CryptosRus.

Bitcoin, Ethereum: Key Narratives To Watch In 2022

As Q1 2022 comes closer to an end, let’s take a step back to cover some of the over-arching narratives that could drive Bitcoin and Ethereum higher in the 2022 bull run.

Covered:

  • Current State Of The Market
  • Bitcoin’s Dominant Narrative
  • Ethereum’s Bull Fuel For This Year

Current State Of The Market

Bitcoin, Ethereum, and the crypto markets have been trading in “limbo land” for the better part of a year now. As on-chain analyst Will Clemente highlights, Bitcoin is floating sideways above support from the LTF (lower-time-frame) realized price (light blue), “in Limbo.”

As we can see from 2013, Bitcoin printed two large impulses in the LTF realized price, whereas the current on-chain readings are looking a lot similar to 2018, when Bitcoin ran out of steam and capitulated below the LTF realized price before resuming “up only.”

Will the next move take us to all-time highs, or is there bloodshed ahead before beginning the next bull run? It’s anyone’s guess, but those bull runs will be largely dependent on the “success” of these narratives brewing behind the scenes for Bitcoin and Ethereum.

RECOMMENDED: LATEST UKRAINIAN ADOPTION DATA SHOWS CRYPTO’S PIVOTAL ROLE IN CRISIS

Bitcoin’s Dominant Narrative

Considering all the macroeconomic conditions backdropping the crypto markets, there are countless reasons to be bullish on hard money like Bitcoin. The biggest catalyst for Bitcoin adoption, however, is the rising relevance of censorship-resistant money in the face of uncertainty. The pandemic exacerbated the problems with our inflationary monetary system, but the rise of increasingly-nefarious actors in authority is driving more and more people towards a hedge against it altogether.

No matter what your metaverse gem might have coming on its roadmap, there are thousands, if not, millions of people around the world right now learning the importance of hard money in their direct lives.

Of course I’m not calling for an authoritarian uprising from all first-world governments, but I’d reckon that the events unfolding since the onset of the coronavirus pandemic have only pushed the narrative for Bitcoin adoption further onto the mainstage — the price appreciation since then certainly suggests so.

Additionally, the Biden administration recently just gave the green light for “responsible” crypto regulation in the US. This is a big deal, not because of what Biden directly said policy-wise, but because the long-spoken FUD (fear, uncertainty, doubt) about harsh crypto regulation is finally coming to an end, leaving opportunity wide open for Bitcoin.

RECOMMENDED: WHAT ETHEREUM DEFI TELLS US ABOUT THE SURPRISING STRENGTH OF THE CRYPTO MARKET

Ethereum’s Bull Fuel For This Year

Now taking a look at the second-largest crypto asset, Ethereum is quite a polarizing crypto in the overall market, but its future is too bright to overlook. Some Ethereum fans are a bit too married to it, while advocates of alternative layer-1 (L1) blockchains like to scoff at its outrageously high gas fees.

And the clash between these two parties is where the bull narrative for Ethereum fits right into place. Prior to the most recent bull run, Ethereum dominated the L1 landscape throughout the 2017 bull run. It was the primary asset to get exposure to the developing Web3 space.

However, fast forward to today, and there are more alternatives to Ethereum than one person can count. New crypto users are skipping Ethereum entirely to onboard decentralized finance (DeFi) protocols on blockchains like Solana, Avalanche, Terra, etc. This has been a primary theme of the 2021 bull run, as alternative L1s were some of the best, most consistent investments all year round.

Here’s a comparison of a Solana, Avalanche, and Terra basket trade compared to Bitcoin and Ethereum since the rise out of the 2021 summer bear cycle, shared by Three Arrows Capital CEO Zhu Su back in December.

Ethereum’s primary narrative building in 2022 is its transition to a proof-of-stake blockchain from proof-of-work. If implemented successfully, we could see a drastic decrease in the gas fees on the platform, and thus open the flood gates for retail investors to adopt and use Ethereum’s own DeFi rather than that of alternative L1s.

Ethereum already has the network effect, the first-mover advantage, and all the recognition, it just needs scalability. This move won’t totally wipe out other smart contract platforms, but it could establish Ethereum as the de facto smart contract platform for DeFi settlement. Until that happens, however, expect other L1s to continue eating away at Ethereum’s market share.

These are the two narratives brewing for Bitcoin and Ethereum in 2022. While Bitcoin is focused on restoring sound monetary properties to our financial system, Ethereum is spearheading the rise of the Web3 industry. Both assets have their niche, and neither one needs to win out over the other. In a truly revolutionized financial system, both of these technologies will find themselves at its foundation.

The post Bitcoin, Ethereum: Key Narratives To Watch In 2022 appeared first on CryptosRus.