[Review] The 2021 Crypto Crystal Ball: Halftime Edition

You can find said article here.

Rather than analyse whether each investor has an accurate crystal ball instead, I’ve decided to use topic modelling to see whether investors as a general crop picked major topics that turned out true.

With some help from Topic Modelling for Everyone with Google Colab rather than coding from scratch, we have 4 main topics. Each topic will have its main keyword followed by its top sentences that represent it. You can view my file here. This will give you the full breakdown.

Disclaimer: I relied quite heavily on the template model, therefore there will be some issues with the preprocessing step! However, it does provide some interesting results

Bitcoin is most mentioned followed by defi

These predictions mentioned Bitcoin most frequently. They were somewhat right as news on Bitcoin dominated the hype cycle frequently. concerns about protocols, new offerings, regulation, companies, and the social aspect of cryptocurrencies are next most frequent. It is no surprise as the crypto ecosystem ultimately consists individual users that make up these companies.

Topic Breakdown

Topic 1: Institutional adoption of crypto via Bitcoin and tokens

KEYWORDS: crypto (4.8) bitcoin (4.44) tokens (3.07) social (3.05) adoption (2.46) value (2.2) institutional (2.17) lightning (2.14) new (2.11) 2021 (2.11)

These were the values that came up for the first topic. I suppose they were somewhat right about this because quite a few banks have started custody services for cryptocurrency such as

  1. DBS Digital Exchange
  2. JPMorgan
  3. Standard Chartered

However, the key word here that came up was lightning network. These predictions, mostly driven by faith in emerging economies adopting Bitcoin were banking (pun intended) on these countries tapping on lightning network to lower network congestion.

Overall 8/10 accurate

Topic 2: Defi and crypto offerings

KEYWORDS: defi (2.81) btc (2.75) bitcoin (2.47) banks (2.34) crypto (2.14) offerings (1.66) world (1.65) protocols (1.63) companies (1.6) 2021 (1.56)

I have to say, they were spot on. One prediction stated “Defi TVL will pierce $100B”. Another prediction mentioned that foreign exchange would be the “most under-discussed yet the most contested battleground in Defi”. I reckon this predicted the DEX wars which Uniswap mostly won.

Overall 9/10 accurate

Topic 3: Crypto trading keeps increasing

KEYWORD: crypto (4.89) continue (2.44) bitcoin (2.33) like (2.29) year (2.17) 2021 (2.12) companies (2.07) start (2.0) market (1.87) trading (1.73)

I think this can’t really be considered much of a prediction than simply an observation. Trading volumes have indeed gone up quite a bit for 2021. However, what this prediction was leaning towards was that more companies will start trading in crypto markets. As “more” is somewhat subjective, I can’t really give this a high score.

Overall 7/10 accurate

Topic 4: Increased adoption by companies due to better usability

KEYWORDS: crypto (2.99) year (2.77) like (2.24) defi (2.22) new (2.19) going (2.13) ll (1.94) adoption (1.91) companies (1.9) run (1.88)

This does seem somewhat accurate! When more people work on the UX of crypto applications it does improve adoption and thus increase the user bases. These users may simply be companies that would like to experiment with cryptocurrencies. However, there is no definitive metric used to look at how many companies have come on board the crypto bandwagon, so hard to give this a proper score.

Overall ?/10 accurate

In summary

I like to believe that one can either wait for the future, or choose to build it. The illustrious folk on this list must have had a hand in making their own predictions come true, actively working through their funds or developer activity. Perhaps rather than reviewing their accuracy, this could be a review on the success of the ecosystem as a whole. (and it has been quite successful!)

ever curious