My 2022 Predictions

I have been asked by a couple of people if I could make a few predictions for 2022. Something I have not done in the last few years for various reasons.

Since this is something i regularly dwell in, I have chosen to take up the challenge here on the last day of the year to deliver my thoughts on what will happen in 2022.

Before I do that though, I just want to make a few comments on 2021.

For me it's been the year of Web3 / Blockchain / NFT and Crypto both in terms of where I spent my time studying and reflecting, but also where my investments moved to. Both those that are capital based but also the type of projects I spent my time design/advice and develop. A number of these are coming out next year and I look forward to sharing them with you.

2021 was in many ways an even more extreme year than 2020. A year in which many many of our Western institutions and "this is how we normally do things" were seriously challenged.

We all grew up with American films that describe a superior American military that, like a hyper efficient cavalry, fights in the service of the good cause and can overcome any challenge.

We also grew up with films about American FEMA who in the event of a pandemic have complete control over how this is handled and always end up with finding patient zero and help the world become normal again.

And what about Wall Street as the powerful elite that controls the world economy with a heavy hand from the skyscrapers of Manhattan.

Or the central banks' control of the global economy and stabilization of inflation around 2%.

On the whole, we have grown up with the narrative of the Western institutions' ability to handle anything, usually told by the media, politicians and not at least Hollywood.

2021 was a long fuckfinger for most of these naratives.

Whether it was January 6, WallStreetBets, the withdrawal from Afghanistan, the vaccines controversy, the "Wuhan Lab Leak" thesis, the alleged transitory inflation, the logistics crisis, the energy prices and we could go on.

Covid gave us an X-ray of how these organizations and institutions work without the opportunities for retakes, greenscreening, hiding behind rhetoric (but lord did they try) and editing that are usually required to create a good Hollywood story.

But why is it so important when it comes to predictions?

Because this X-ray sample, pointed out how out of sync the major national and supranational institutions are with reality and this has enormous consequences for how events unfold moving forward.

The SEC is made to regulate a handful of large institutions. They are not made for millions of investors who can operate freely and develop services and exchanges much faster than they can legislate.

The FDC/CDC is made to deal with the pharmaceutical industry and predictive recurrent epidemics. They are not made to deal with a pandemic with citizens who have very different ideas about what is risk and what is not and the ability to program vaccines almost on the fly.

The FAA is made to regulate Boing / Airbus and a few airlines, they are not made to regulate one million drone pilots.

On the whole, it has become clear that the institutions that served us well after World War II are not able to handle the new reality we find ourselves in.

The nation states that could, have thrown money on the problem. Whether it is PPT loans for businesses they themselves closed down or eviction regulation, relief packages for citizens or covid related jobs/process/solutions at astronomical cost.

There was a lot you could spend money on if you wanted to look like a government that is in control, and boy did they deliver on that.

40% of all USD ever printed was created in the last year and a half.

There has never been so much money available and therefore never so much demand places they can breed.

With an inflation rate of 6% and the prospect of further increases, electricity prices skyrocketing and extremely low even 0 to minus interest rates in many countries, there are not many places where you can put your money and still expect beat inflation over a longer period of time.

There are currently only 4 areas that can beat inflation:

• Properties
• Equities
• Angel / Venture Capital investment
• Crypto / Web3 / Art

It is this reality which ex. resulted in BlackRock starting to buy real estate on a large scale at above market price and then renting them out.

It is also this reality that makes the stock market generally rise significantly across the board and especially for a small selection of companies that accounts for most of this increase.

Or that startups are valued up to 1500 times their turnover and that astronomical amounts of capital have been raised by startups.

Last but not least, it is also this reality that really established crypto / Web3 as a serious hedge which at its highest had a market cap of about 3 trillion with Bitcoin alone at 13th place compared to other nation states economies.

Furthermore this is an area that is not close to stopping its development but instead accelerates so fast that it is difficult to keep up with even if one spends all their waking hours following 24/7 as many do.

It's particularly interesting because it this field not only challenges the economies of the nation states (check out the Senate hearing from a few weeks ago) but also the political system in a little longer perspective.

As it turns out, Blockchain / Crypto is much more than just speculation.

NFT's made it possible for creatives and artists to profit from their creations in completely new ways.

Crypto games evolved into real economies that are more and more like the real world (see ex. the rise of Axie Infinity)

DAO's made it possible for us to organize itself in completely new ways and be rewarded for contributions completely without the use of a legal system.

All the most talented people I know choose crypto / web3 when they have had time to go down the rabbit hole.

Web3 gives everyone an opportunity to rethink existing systems without the need to destroy them.

And as always when it comes to innovation and progress, you rarely truly win because you make a better version of what already is, but because you make the existing system redundant.

Of course, this does not mean that the existing system and way of doing things is close to disappearing; the number of people in crypto is still relatively limited. But if you consider where the hockey puck is going then there is no doubt that Crypto here to stay, it's just too fundamental yeah I would even claim it's a new kind of resource.

Another exciting area is what is called New Space. SpaceX is an obvious example but even more interesting is to look at what SpaceX is really up to.

At its core, SpaceX is a vertical version of the Baltimore & Ohio Railroad. Infrastructure that makes it relatively cheap and easy to transport products and materials from A to B.

In the case of SpaceX, it is moving things into space and the important of this can not be stressed enough.

A typical NASA launch costs around $160M. SpaceX is well on its way to getting it down around $ 2M and with a significantly larger payload per launch, the goal is to be able to get a kilogram of material in orbit around $16- $20.

Already now, SpaceX has reduced costs dramatically and thus the opportunities for the space travel industry are becoming more and more interesting to invest in.

There are already a couple of space-focused VC finds such as Space Angels that are interesting to follow and I think we'll see a lot more of this if Elon continues to have success in that area.

A few great books I can recommend on this subject is. "The Case for Space" by Robert Zubrin and "Space is Open for Business" by Robert Jacobson.

This rapid development doesn't apply to the business side alone.

There is a reason why the US now has a SpaceForce. China have gone all in on dominating space and thereby launched a new arms race.

It is well known that the one who controls the airspace dominates, the same can be said about the orbit. So my guess is that we will see more inventions and funding regarding space in the next few years than we have since SpaceX came into being.

Having said all this, I will now habitually share my predictions for 2022.

As always none of this is investment advice. Do your own research.

Crypto / Web / Startups

• Startup funding will break new records as there are still not many places to put your money.
• San Francisco and Sillicon Valley will continue to lose influence on where the startup environment is headed.
• We will see more unicorns than ever.
• Roblox and Sandbox will dominate the metaverse discussion
• Many financial institutions will adopt DeFi (Also called DeFi mullet)
• Ocolus sales will continue to skyrocket (Ocolus Quest2 can very well be said to be the iPhone momen for VR)
• Crypto will continue to rise in 2022.
• Bitcoin and Etherum will still dominate.
• NFT's will continue to be popular in 2022, but many of the projects will fail and lose most of their value.
• DAOs will continue to evolve and affect more and more areas where organization is needed in a positive (but disruptive) direction.
• Crypto gaming will really take off when a number of games that have been under development launch next year. Crypto Gaming is at a minimum 100X the NFT's art market.
• The whole market will have a major crash next year if Ethereum 2.0 does not deliver on the lower gas fees (they wont), or politicians decide they do not want crypto.
• A number of major scams for crypto will create uncertainty in the market (which may give politicians who are opposed to crypto an opportunity to force draconian regulation through)
• However, the long term market is nowhere near finished growing. So if you can afford to be long on this (+5 years) then I think it is something to consider whether it is as an investment or as an area to create something in.

Political

• The US will finally provide clear advice in the crypto area so there is legal clarity.
• Several cities and regions around in the world will try to attract talent to their areas by being more pro blockchain. Erik Adams New Yorks new mayor chose to be paid in Bitcoin in his first 3 months.
• More and more cities will become positive about DAO's.
• Erik Adams (Democrat) will prove to be a great mayor of New York and clean up a lot of what DeBlasio destroyed.
• In the United States, during the midterm elections, there will be a voter rebellion against the extreme sides op the political spectrum.
• Democrats in particular will be forced to reject the most extreme views of their fringes to maintain political power.
• California and especially San Francisco and LA will turn 180 degrees and try to get to grips with their problems around homelessness. It is not an economic problem but political one.
• Cities not states will compete to attract all those who can now work from home and do not have to show up at an office anymore.
• The US and China will have a minor armed conflict, possibly as a proxy, possibly in space.
• The climate rhetoric of climate catastrophists will be turn even louder.
• Inflation will continue to rise
• Energy prices will rise and we will begin to see the consequences of the unrealistic and irresponsible "green" energy policies like wind tax credits.
• Coal, oil and gas will be used more than ever.
• Anti-capitalism sentiment will increase
• Capitalism will pull more people out of poverty.
• Covid will not be a problem a year from now unless a more dangerous and contagious variant turns out.
• Politicians and the media will still try to create fear in the population.

With this, I wish everyone a happy 2022 and hope to see many of you around.