Earlier this year, we gathered mid-to-long-term investment outlooks and advice for crypto beginners from several influential Taiwan-based crypto Key Opinion Leaders (KOLs). Now, more than half a year later, how have their predictions fared? More importantly, what are their views for the final quarter of 2021 and beyond?
Looking Back at Earlier Predictions
The crypto market has experienced tremendous growth since Bitcoin first broke its previous all-time high in late 2020. Following our interviews in February, Bitcoin's price surged to a new peak of $60,000 in April, leading a massive expansion in the total market capitalization. Despite a significant correction in May, Bitcoin's value in late September remained substantially higher than it was in February. Consequently, a review of the assets recommended by these KOLs shows that nearly all have seen positive price appreciation.
Among the top picks, Binance Coin (BNB) performed exceptionally well. The rise of the Binance Smart Chain (BSC) established it as the blockchain with the second-highest Total Value Locked (TVL), just behind Ethereum. Following BNB, the exchange token FTT from FTX also saw impressive gains, bolstered by significant funding rounds and its deep ties to the Solana ecosystem. Ethereum (ETH) itself rounded out the top three, with its price bolstered by the anticipation of a deflationary model following the implementation of the EIP-1559 upgrade.
KOL Highlights and Regrets
Various KOLs shared their most successful calls and their biggest misses from the first half of the year.
Many expressed satisfaction with their calls on major platform tokens like BNB and FTT, citing the explosive growth of exchanges during the bull market and the powerful ecosystems built around BSC and FTX. Performance from major Layer 1 protocols like Solana (SOL) and Avalanche (AVAX) also exceeded many expectations, with SOL's rapid ascent into the top ten cryptocurrencies by market cap being a particular standout.
The most common regrets centered around missing the explosive growth of meme tokens like DOGE and SHIB, underestimating the impact of social media hype. Others cited missing out on the early momentum of NFT and GameFi projects like Axie Infinity (AXS), acknowledging that they underestimated the speed at which these projects could attract new users and capital. The strong performance of scaling solutions and alternative Layer 1s like Polygon (MATIC) was also a frequent mention as a missed opportunity.
Mid-to-Long-Term Outlook: Q4 2021 & Q1 2022
Here is a synthesis of where Taiwan's crypto KOLs are looking for the next six months.
Layer 1 and Platform Tokens
The consensus remains bullish on established giants and emerging competitors. Ethereum (ETH) is widely expected to maintain its dominance, with its ongoing development and the deflationary pressure from EIP-1559 providing strong fundamental support. Many also believe its market cap could continue to close the gap with Bitcoin's.
Solana (SOL), Avalanche (AVAX), and Terra (LUNA) are frequently highlighted as Ethereum competitors with strong momentum. Their ability to offer lower transaction fees and attract major development projects makes them top contenders for continued growth. Platform tokens like FTT (FTX) and BNB (Binance) are also expected to continue performing well, driven by their parent companies' aggressive expansion, marketing, and navigation of the regulatory landscape.
DeFi and Niche Sectors
Within the decentralized finance space, established blue-chip tokens like Uniswap (UNI), Compound (COMP), and Synthetix (SNX) are noted for their first-mover advantage and resilience.
The GameFi and NFT sectors are still considered to be in their early stages. Projects that merge gaming with finance or offer unique NFT utilities are expected to see further adoption. Tokens like Illuvium (ILV) and Enjin (ENJ) are specifically mentioned as ones to watch.
A growing theme among several KOLs is the potential rise of privacy-focused projects like Tornado Cash (TORN) and Monero (XMR). The expectation of increasing global regulatory scrutiny could drive demand for cryptographic privacy solutions.
Risk Management and Stablecoins
Amid the optimism, there is a strong undercurrent of caution. Multiple KOLs warn of the potential for a significant market correction or a major "crypto winter" in 2022. This outlook emphasizes the importance of risk management.
A key piece of advice from the community is to remember your investment goal: are you in crypto to accumulate more crypto, or to realize profits in fiat terms? 👉 Explore more strategies for managing your portfolio in a volatile market. Consequently, many recommend gradually taking profits and allocating a portion of a portfolio into stablecoins like USDT and USDC to preserve capital during periods of high uncertainty.
Frequently Asked Questions
What is a crypto KOL?
A Key Opinion Leader (KOL) in the crypto space is an individual with a significant following and expertise who influences the market sentiment and investment decisions of their audience. They often share technical analysis, project reviews, and their personal market outlooks.
Why are platform tokens like BNB and FTF often recommended?
Platform tokens are tied to the success of their parent cryptocurrency exchanges. During a bull market, increased user registration, trading volume, and exchange revenue directly benefit these tokens. They often have utility within their ecosystem, such as reducing trading fees or participating in token sales, creating constant demand.
What is the main risk of investing based on KOL advice?
KOLs provide perspective, not financial advice. The market is highly volatile and unpredictable. Their calls may be based on personal research but can still be wrong. Always conduct your own due diligence, understand the risks of each project, and never invest more than you can afford to lose.
What does "EIP-1559" mean for Ethereum?
EIP-1559 was an upgrade that changed Ethereum's fee market. A portion of the transaction fee (the base fee) is now burned or permanently removed from circulation. This mechanism could, during periods of high network usage, make Ethereum a deflationary asset, potentially increasing its scarcity and value.
What are Layer 1 and Layer 2 solutions?
Layer 1 refers to a base blockchain network, like Ethereum or Bitcoin. Layer 2 is a secondary framework built on top of a Layer 1 to solve its scalability issues, such as high fees and slow transaction times. Examples include Polygon (a sidechain for Ethereum) and Arbitrum (a rollup solution).
How should a beginner approach crypto investments?
Start by learning the fundamentals of blockchain technology. Invest only what you are willing to lose and focus on major, established assets like Bitcoin and Ethereum before exploring smaller altcoins. Diversify your portfolio, use dollar-cost averaging, and prioritize security by using reputable wallets and exchanges.
Disclaimer: Cryptocurrency investment carries a high level of risk. Prices can be extremely volatile, and you may lose your entire investment. Always assess your risk tolerance carefully and conduct thorough research before investing.