Inventory of the five major sector trends in 2021: Who will perform well and who will not be able to afford it?

Looking back on 2021, we can basically divide it into three stages according to the overall market trend, and each stage happens to have its own corresponding dominant narrative:

Before May: The market narrative at this stage is still dominated by "Bitcoin institutionalization". Enterprises such as Tesla, Meitu, and MicroStrategy entered the market; Canada launched the first Bitcoin ETF (Purpose Bitcoin ETF) in North America, and Coinbase was listed on Nasdaq.

From May to the end of July: Induced by various uncertain factors, the market began to plummet and retreat. PoW mining goes against the trend of carbon neutrality, and Musk "turned against the water"; domestic mining bans, bitcoin computing power plummeted; the epidemic situation has improved, macro indicators hinted at inflation, and Taper's interest rate hike expectations made people panic.

From the end of July to the present: hot spots are blooming, the market has reached a new high, macroeconomic factors and the curse of the end of the year have once again biased the market, how will this year end? The rise of the new public chain L1, Axie set off a GameFi boom, Metaverse, DeFi 2.0, Web3.0, the fundamentals of the Bitcoin chain deviate from the market...

bitcoin

bitcoin

As of December 19 in 2021, Bitcoin's annual return is about 63%, with a maximum increase of about 130% and a maximum retracement rate of 52%. It can be said that the market trend of Bitcoin this year is still relatively bumpy.

On February 8th, Tesla officially announced the purchase of $1.5 billion worth of bitcoins, continuing the bitcoin market driven by grayscale bitcoin fund arbitrage in 2020; driven by Coinbase's direct listing on Nasdaq, the market directly It reached its peak, and then under the political correctness of global carbon neutrality, Tesla's backlash against Bitcoin's PoW mining, coupled with the uncertainty of macro-control, the market ushered in a 519 cut in half.

With the sudden plunge of the market and the continuous negative decline, we can clearly see from the data on the chain that long-term Bitcoin holders (LTH) are frantically accumulating money; soon, the total holdings of long-term Bitcoin holders It broke through the previous high, and the bitcoin market also reached a new high under the rotation of various sectors in the market. Interestingly, the time when the first Bitcoin futures ETF in the United States passed is currently another peak in the market. Buy the Rumor, Sell the News!

At present, Bitcoin has withdrawn nearly 30% from the high point. In view of the future macro-control expectations, it seems that the overall market sentiment is also negative, but the data on the chain (supply of long-term Bitcoin holders & exchange Bitcoin balance) are relatively Optimism, which is the main reason why optimists are bullish about the market outlook.

Looking back at Bitcoin's 2021, numerous achievements have been unlocked. The recognition of corporate institutions, the approval of the US Bitcoin futures ETF, the trillion-level assets, and becoming the legal currency of the country (El Salvador), etc.

In terms of price, although the expectation of 100,000 US dollars cannot be realized this year, and the income performance of the hot sector is also very different, perhaps this is the fact that we need to get used to. The volatility of bitcoin prices will gradually converge, and it will be in line with the industry The price correlation of subdivided sectors will gradually break away. In the next 2022, with the implementation of Taper's interest rate hike policy, we will witness whether Bitcoin is still a risky asset class, or it has really become an anti-inflation value storage asset class.

Ethereum

Ethereum

As of December 19 in 2021, the annual return of Ethereum is about 431%, the highest increase in the year is about 557%, and the maximum retracement rate during the 519 period is also as high as 57%.

Last year, the DeFi boom broke out in the Ethereum ecosystem, and this year it has reached a new level. NFT, GameFi, DAO, and Web3.0 are all very popular. EIP1559, which was activated on August 5, made up for the shortcomings of the ETH economic model and completed the value capture of ETH for ecological prosperity. At the same time, qualitative progress has also been made in the scalability L2 solution.

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multi-chain L1s

From the perspective of revenue performance alone, perhaps the new public chain is the biggest winner. The figure above shows the income performance of mainstream new public chains since December 19 in 2021. The specific order is Terra (Luna, 112x), Solana (SOL, 99x), Fantom (FTM, 82x), Harmony (ONE, 50x ), BSC (BNB, 13x), Cosmos (Atom, 3x), Polkadot (DOT, 2x).

At present, the industry has formed a multi-chain structure centered on Ethereum, but the ecology of the new public chain is similar, and the main method is to attract liquidity funds through ecological incentives.

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Metaverse & GameFi

In the second half of this year, under the leadership of Axie Infinity, the GameFi track exploded. As the leader of the track, Axie (AXS) had a return of 167x for the year as of December 19, and the highest return of 300x during the period.

On October 28th, Facebook announced that the company changed its name to Meta, focusing on creating the Metaverse world. This news once again detonated the metaverse track, and Decentraland (MANA) and The Sandbox (SAND), as the leaders of the track, also ushered in exponential skyrocketing. As of December 19, MANA's annual return was 31x, and the highest return during the period was 47x. The annual return of SAND is 119x, and the highest return during the period is 175x. And their main gains are basically completed within one month after Facebook's announcement.

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DeFi

As we all know, the rhythm and hotspots of the encryption industry switch extremely quickly. No, the DeFi sector that was popular a year ago is now called Old Money. And the DeFi sector, which has lost its market popularity, has a very average income performance, and some project tokens can't even outperform Bitcoin.

The above figure shows the income performance of mainstream DeFi tokens since December 19 in 2021. The specific order is: MKR (317%), UNI (221%), BNT (155%), AAVE (104%), LINK (68%), YFI (47%), COMP (41%), BAL (30%).

If we look at the exchange rate trend of these mainstream DeFi tokens and ETH trading pairs, the scene is even more unbearable to gamble!

Although in the second half of this year, a concept of DeFi 2.0 emerged in the market, mainly referring to the DeFi protocol with micro-innovations in terms of capital efficiency and liquidity, unfortunately, the hot spot is the apex, and now it has disappeared.

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Summary & Outlook

In general, in 2021, we will catch the bus of the bull market. During this period, there will be fast trains for getting rich in various sub-sectors. At the same time, the industry infrastructure has also improved qualitatively. Looking forward to 2022, will Taper's interest rate hike and other macro-control expectations end the bull market that has lasted for nearly two years? If it enters a bear market, will the industry still be as dead as before? Under the background that the industry infrastructure is relatively complete and the ecological application has been initially built, will there be more and more innovative applications? Can the concept of Web3.0 explode? What interesting subdivision tracks will Web3.0 derive? Is it social, art, games, DAO, or what?

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According to the "Notice on Further Preventing and Dealing with the Risk of Hype in Virtual Currency Transactions" issued by the central bank and other departments, the content of this article is only for information sharing, and does not promote or endorse any operation and investment behavior. Readers are requested to strictly abide by the laws and regulations of the region and do not participate in Any illegal financial conduct. Wu said that without permission, it is forbidden to reprint or copy the content, and those who violate it will be investigated for legal responsibility.

According to the "Notice on Further Preventing and Dealing with the Risk of Hype in Virtual Currency Transactions" issued by the central bank and other departments, the content of this article is only for information sharing, and does not promote or endorse any operation and investment behavior. Readers are requested to strictly abide by the laws and regulations of the region and do not participate in Any illegal financial conduct. Wu said that without permission, it is forbidden to reprint or copy the content, and those who violate it will be investigated for legal responsibility.