Ryan Selkis, the founder of crypto data firm Messari, says that bitcoin (BTC) is a “contrarian bet” for 2022 — meaning that performance-wise, the asset could come as a rank outsider on a turf it has long dominated.
Dynamics in the crypto industry have changed, Selkis argues. While Bitcoin die-hards remain focused on BTC, and Ethereum maximalists on ETH, investors are pumping a lot more money into assets that have a better short-term return, he says.
He calls these sort of investors “crypto mercenaries” — degens to ordinary cryptocurrency folk. They typically target emerging layer-one digital assets such as Solana (SOL), Terra (LUNA), and Avalanche (AVAX) — the trio which has now achieved meme status as SoLunAvax.
In the last year, SoLunAvax swayed huge sums of money away from Ethereum, and possibly Bitcoin, according to some data. A number of other upcoming blockchains including Cosmos, Near, and Polygon have also claimed their share.
Selkis said there is another subgroup of investors who would “never opt for bitcoin”. These he calls “generalists”, and they prefer everything else but BTC. Precisely, “generalists” are drawn to a combination of layer-one crypto assets, those in decentralized finance (Defi) and others.
In that sense, the Messari founder and CEO believes that “Bitcoin is the contrarian bet for the year,” according to a recent post on Twitter. Selkis deflected questions to Emily Coleman, a spokeswoman for Messari, who did not respond to requests for comment from BeInCrypto.
Bitcoin dominance declines
While some experts forecast that the price of BTC will hit $100,000 this year due to increased institutional adoption, Ryan Selkis was silent on price.
However, the trend suggests a continuation of bitcoin’s declining market share in dominance terms in 2022, perhaps to as low as 10%, as one analyst predicted.
Bitcoin’s market value relative to altcoins — basically any other crypto asset which is not BTC — is now 39.3%, its lowest since June of 2018.
The data shows that more people are ditching bitcoin, and instead, moving into altcoins. This dovetails with Selkis’ “contrarian bet” expectations.
In addition, the declining dominance might be an indication that some altcoins, particularly layer-one blockchains such as Terra, Fantom, or Avalanche, may be starting to decouple from BTC’s price action.
One of the obvious reasons for this is Bitcoin’s failure to develop as a productive asset, says crypto analyst Austin Barack. Bitcoin has failed to attract developers that build more usable protocols and applications on top of Bitcoin.
It has also struggled to handle increased transaction volumes, leading to the emergency of other blockchain networks that could do so. As the newer networks grow, Bitcoin risks losing more if maxis fail to embrace change.