Week of Dec 28, 2021

Predictions For 2022!

Big Options Expiration Week ahead. SEC Denies and Delays Spot Bitcoin ETF Applications.

đź’¬ Market Commentary


As Bitcoin wraps up an excellent year, we wanted to spend a minute to celebrate how far we have come, and make a few predictions as to where we could be headed next year. 

Although we are not closing the year at a new all-time high in price (as some proponents of Plan B’s S2F model had predicted), there are several other all-time highs to celebrate for the network. 

To start, the number of addresses holding balances above 0.1 BTC and above 0.01 BTC are at their all-time highs to close the year. This is a huge testament to organic adoption and uptake. There are now over 12.5 million addresses holding balances above 0.1 BTC and 0.01 BTC. 

Moreover, the daily active address count is comfortably over 1 million per day - which means that there are now over 1 million addresses transacting every day. For context, we briefly crossed that mark at the peak of the market in 2018 - and have been comfortably above it since mid 2020.

We also had the first-ever Bitcoin Futures ETF hit the market in the United States, and it has become wildly popular. Bloomberg ETF analysts project that ETFs will hold over $1 Trillion in assets over the next 10 years. That’s more than a 10X increase from the current $66 Billion in assets they hold. 

We’ll get into our predictions for 2022 in our What’s Ahead section, but before we close out the section we wanted to provide an update on the SEC’s decisions regarding spot Bitcoin ETFs. 

Last week the SEC quietly rejected two (2) spot ETF applications from Valkyrie and Kryptoin.

In addition, it also postponed the decisions on the Grayscale Bitcoin Trust and the Bitwise ETF until February. 

Interestingly, GBTC shares tightened their discount to their net asset value from -21% to about -15% on the news - signalling that investors are optimistic about the fact that the decision was delayed, and not denied.

There are almost 130,000 BTC worth of options contracts expiring this week - with the bulk of them being call options. 

A large number of the call contracts that are open are above the $56,000 price strike - meaning that there will be a lot of pressure to keep the prices from closing the year below that level. However, if there is a spike up in prices before we close out the week, the number of open contracts above $56k could act as a catalyst higher as sellers need to hedge their delta exposure by buying spot btc. 

We are heading into a thin week of trading volumes, with a volatile macro environment and a massive options expiration on Friday - volatility should be expected.

S&P 500

The year wraps up and the S&P is poised to close out one of its best years ever - up over 25% year-to-date. 

Other U.S. equity indexes performed very well as well, like the Dow Jones and the Nasdaq. The worst-performer out of the bunch will come as no surprise to regular readers - it is the Russell 2000, which tracks small cap stocks within U.S. markets. 

Inflation continues to soar, and it seems that despite the Fed’s best efforts to taper their bond purchases, a strengthening dollar, concerns about future economic growth, and the new standing repo facility, seem to have made the value proposition of treasuries quite appealing in the current environment. This means that yields have been slow to rise so far after the Fed’s announcement. 

Inflation continues to soar and is expected to continue into the new year as the Fed is prepared to do up to 3 baseline rate-hikes. If and when this happens, it is likely that there will be a sector rotation away from technology into financials, as banks tend to do better in higher rate environments, and technology valuations suffer as their future cash flows have to get discounted at a higher rate into the future.

There is also the concern that, eventually, investors will start thinking that stock valuations have become disconnected from the real value that the companies deliver. 

The S&P price to earnings multiple is at record levels. At the same time, there has been an unprecedented amount of inorganic money injected into the system - so investors are trying to find the new equilibrium point.

We could be starting to see some of that play out in the housing market. Where prices continue to soar, but the volumes are trending much lower as way less people can participate at the new price points.

Similarly, prices of used vehicles in the U.S. are at historical highs. 

Americans are feeling sticker shock everywhere. Expect the conversation around inflation in middle America to pick up a lot of steam into the new year. The probe into Turkey prices over the U.S. holidays could be a canary in the coal mine to more animal protein probes ahead in 2022.


We may look back at the years 2020 and 2021 and refer to them as the years in which the great transition from Gold to Bitcoin started. 

Looking at Google Trends, we see that the trajectory is clear. Search interest for the word “Bitcoin” has now surpassed search interest for “Gold” twice. Once during the 2018 market peak, and once again in May of this year.

At the current pace, we may see global search interest for Bitcoin surpass that of Gold during 2022. That will be a historic moment.

For context, gold is a $13 Trillion market, and Bitcoin’s market capitalization is $1 Trillion. A 10% change in allocation from gold to bitcoin would more than double Bitcoin’s market capitalization (and itss price).


2021 was a great year for Ethereum and Decentralized Finance. Ethereum finished the year +440%. Most layer 2 tokens underperformed Ethereum, but still had excellent years. 

Digging deeper into Ethereum adoption, we see that the number of addresses holding more than 0.1 ETH almost doubled over the course of 2021, at over 6.42 million addresses currently. 

And while the pace of adoption of Ethereum can’t be denied, there was one smart contract protocol that stole the show in 2021 - Solana.

In terms of price, as you can see from the chart above, Solana’s price appreciated more than +10,000% in 2021 - dwarfing Ethereum’s +440% and Bitcoin’s +70% returns for the year.

What could the next year have in store for smart contract protocols?  Check our predictions for 2022 in our What’s Ahead section.


The most recent difficulty adjustment kicked in on Christmas day and brought difficulty a tough higher +0.32% to 24.27 THs. We continue to trend close to the all-time high of 25 THs, and we will likely resume our climb in the months of January as large site development resumes work from the holidays. 

Looking at the mempool, things continue looking good. We have started noticing recent spikes in activity and price, however, they quickly revert back to normal as transactions are absorbed and processed by the network.

What's Ahead

As our last issue of the year wraps up, we wanted to spend some time sharing some predictions for 2022. Whether this is your first time reading us, or your 50th one, THANK YOU. We look forward to seeing how our predictions play out with you throughout the next year!

The first-ever bitcoin-bond issuance by a Sovereign state will occur in 2022, when El Salvador’s Bitcoin City bond offering hits the market. There is a very good chance that the bond auction will be successful  - although it may not be fully subscribed. 

A Bitcoin spot ETF will be approved in 2022. It will likely be the Greyscale Bitcoin Trust. While it may not happen in February 2022, we may see an approval towards the fall or winter of 2022.

While sovereign bonds offered outside the traditional rails of financial institutions will have limited appetite, that is not the case for U.S. corporate debt related to bitcoin. More corporations will announce bond issuances to purchase bitcoin, similar to Microstrategy’s. We may also see successful bond offerings from large U.S. based mining companies. This, along with a welcoming regulatory environment and competitive energy costs, will help North America become the epicentre of the bitcoin mining industry. 

Bitcoin financial services like loans, savings and bitcoin mortgages will continue to grow in popularity globally as individuals realize that it can give them access to better rates and service than their legacy financial service providers. 

Institutions will continue pouring into bitcoin - with insurance companies, endowments and pension funds announcing balance sheet positions throughout 2022. Many of them are critically underfunded, and are looking for sensible ways of increasing their potential upside. 

The pressure for upside will continue fueling “the great migration from gold to bitcoin”. This is a trend that has been true for 2021 - a year when inflation ran rampant gold has had a year-to-date performance of -4%, when bitcoin is up +84% in the same time frame. 

On-ramps and off-ramps for bitcoin in markets outside of the U.S. will continue to develop to catch up with the variety and quality of consumer choices for financial services that exist in the U.S. This is an area of focus for us at Ledn, and a trend can continue empowering millions around the world to join the new digital economy. 

Outside of Bitcoin…

The market capitalization of stablecoins will surpass $500 Billion in 2022. For context, the entire supply of stablecoins was ~$30 Billion at the start of 2021, and it is on pace to finish the year above $150 Billion - that’s a 5X increase. Stablecoins have not grown faster because of regulatory uncertainty - however, this may change in 2022 as some stablecoin issuers obtain banking licenses and/or partner with banks for their offerings. This will keep stablecoins growing and could even accelerate the speed of growth into 2022.

An Ethereum Futures-based ETF will be authorized in the United States next year. Given the recent trajectory of institutional demand for Ethereum, and the newly approved Ethereum futures and micro-futures on the CME, it is only natural for an ETF to be the next step. The SEC still looks like it needs more time to get comfortable with a spot-based ETF. 

Meta (previously known as Facebook), will get into the NFT space in some way. It could be a marketplace, or enabling artists and creators to mint and sell NFTs for its metaverse. Regardless of the form it takes, it will bring a lot of big name brands along with it - all hoping to create a new ecosystem to capitalize on. Service providers will likely try to create big events such as concerts and conferences to draw people to the experience.

A big video game studio like ActivisionBlizzard or Electronic Arts will incorporate NFTs into some of their video games. Over time, design standards should emerge to make a certain type of NFT interoperable between similar video games.

It's a relatively quiet holiday week coming up, and as always, we'll keep you posted on any relevant news throughout the week right here and from our Twitter account.

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About the author

Mauricio Di Bartolomeo

Mauricio is the co-founder and Chief Strategy Officer of Ledn.io. He grew up in Venezuela where he and his family learned about Bitcoin. Now based in Canada, Mauricio holds HBA and MBA degrees from the Richard Ivey School of Business in London, Ontario in Canada.