We asked the experts in Alts their 2022 predictions. Here's what they said
Predictions from Alts founders and experts on what will happen in 2022
2021 was a banner year for alts.
Alts have gone mainstream. They’ve captured the interest — and wallet share — of individual and institutional investors alike.
We witnessed numerous alts companies across all areas cross the chasm to unicorn status in 2021 — from wealth management access platforms like iCapital Network ($6B) to retail alts investment platform Republic (>$1B) to art investing platform Masterworks ($1B) to blockchain-based gaming businesses Sorare (>$4.3B) and Axie Infinity ($3B) to NFT marketplaces like OpenSea ($1.5B).
Investing has become culture. Ownership has become the fundamental word of the past year for investing. Alts have taken center stage as people want to own things — and own things they are passionate about.
So, after a big year, what’s next for alts?
I share some of my predictions below, but more importantly, we asked the experts what they believe 2022 has in store for alts.
Their predictions covered everything from financial markets’ impact on alts in 2022 to Meta acquiring a blockchain-based gaming company like Axie Infinity to comic books becoming an asset that institutions invest into to a NFT generating more revenues than game day ticket revenue for a sports team to the rise of DAOs to liquidity-as-a-service (LaaS) becoming a critical component to pushing the alts space forward.
My predictions for Alts in 2022
Sports x investing will continue its convergence with a DAO buying a sports team in 2022. Crypto companies will continue to sponsor sports teams as crypto goes mainstream, like FTX did with Miami Heat’s arena and as Crypto.com did with their 10 year, $700M contract with the Staples Center and their recently announced partnership with Angel City FC, but crypto and investing will converge even more with sports in 2022. A DAO will buy a sports team. KrauseHouse DAO is a candidate to buy a professional basketball team and WAGMI United could be a candidate to do the same in soccer.
An Alts platform will IPO in 2022. An alts investment platform will have an IPO.
A blockchain-based game (Sorare, Axie Infinity, Dapper Labs) will hit decacorn ($10B valuation) status in 2022. Blockchain-based gaming will continue its rise. One of Sorare, Axie Infinity, Dapper Labs (or all three) will hit a $10B valuation in 2022 as they continue their march towards overtaking Electronic Arts, Inc. ($36B market cap, ~$8B annual revenue) as a market-leading gaming platform in the next 3-4 years.
Financial advisors will recommend at least 1-2% crypto allocations for their clients. Crypto proved in 2021 that it’s here to stay - and Web3 is only in its infancy. We are still so early. Bitcoin and ETH have asserted some level of dominance in crypto and have carved out a place in investors’ portfolios, but, much like the late ‘90s, where we couldn’t have predicted the sheer size and scale of growth in market cap of Amazon or Google, it remains to be seen which cryptoassets will become the big winners. As a result, index fund providers like Bitwise, 21Shares, Alongside, and private markets focused fund of funds investment platforms will be the beneficiaries of financial advisors and institutional investors taking a diversified approach to crypto asset allocation as they want to ensure that their clients have some exposure to crypto.
ETH will hit a new ATH in 2022. ETH will double to hit an ATH of at least $10,000 in 2022. It would not surprise me if ETH becomes a $50,000 asset in 2-3 years.
Products that unlock liquidity will be a big theme for the continued development of the alts space in 2022. Similar to Leore Avidar’s prediction (see below), I believe that companies that develop solutions to create liquidity for investors who want to hold their assets (like NFTs, sports cards, art) will become a major focus for investors and builders in the alts space. NFTs provide a particularly visceral example of why investors may not want to sell their assets - when they relinquish ownership of their NFT asset, they no longer have membership into that community. That’s a big reason why we’ll see products that enable asset holders to receive liquidity while still holding those assets. That’s also why we’ll see an entire market structure built around valuation and pricing of these assets. Companies like Curio for NFTs and Alt for sports cards will emerge as category leaders in pricing their respective alternative assets.
A bank will buy a retail crowdfunding platform in 2022 to expand their ability to serve clients across all asset classes. Recognizing the demand for alts from individual investors, a bank will buy a crowdfunding platform to enable their retail clients to access private markets in a compliant, curated manner. Perhaps Morgan Stanley’s investment into Republic’s recent $150M Series B round is foreshadowing for more bank involvement in retail crowdfunding platforms.
What did the experts have to say?
Lawrence Calcano, Chairman & CEO, iCapital
We believe allocations to private assets will continue to increase as both bank and independent CIOs have increased their target allocations to alternatives, and as Financial Advisors seek the benefit of alternatives for their clients. In this context, we expect continued interest in private and growth equity oriented investments, including a significant increase in investing directly in companies as a complement to fund investments. Further, we expect continued priority and focus on yield oriented investments, such as private credit and Real estate.
Importantly, we also think that Impact Investing will expand significantly over the next year, and genuine investor focus on a “double bottom line” will lead more investment managers to offer real impact oriented investments. We also expect investors in this area to be much more discerning and wary of anything that smells of “greenwashing”. This should lead to the development of common impact oriented metrics and definitions that will be tracked closely along with financial metrics.
You can listen to Lawrence’s podcast here on Alt Goes Mainstream to hear more about how iCapital is building the core infrastructure for the wealth management community to access alternative investments.
Leore Avidar, Founder & CEO, Alt
Alt platforms will start consolidating in 2022 which will create tighter communities and push prices up in industries that are less fragmented.
Having oracles or appraising mechanisms for Alts is going to be a requirement for an alt to succeed.
Alt lending platforms will dominate in 2022 as people who were in search for yield in 2021 now move to a search for liquidity in 2022.
Liquidity-as-a-service (LaaS) becomes a dominant theme. Coined here first :-)
You can listen to Leore’s podcast here on Alt Goes Mainstream to learn more about the evolution of sports cards as an asset class.
Ken Nguyen, Co-Founder & CEO, Republic
BTC (aka “Boomer Coin”) hits $100K by Q3 2022.
Meta to acquire Axie Infinity.
First tokenized real estate offering of $100M+ available to the masses.
Companies to start issuing NFTs to investors in their private rounds.
Presidential candidates gearing up for the 2024 election will issue their own NFTs and accept crypto contributions.
You can listen to Ken’s podcast here on Alt Goes Mainstream to hear more about how Republic is championing the retail revolution and democratizing access to private markets.
Ed Swenson, Co-Founder & COO, Dynasty Financial Partners
My belief is that where alts were exclusively the bastion of Ultra High Net Worth client investors 5 and 10 year ago – in the next 5-10 years you will see the alts asset class in every single end client account. As an industry, how we create, implement and structure this access will be a great opportunity.
You can listen to Ed’s podcast here on Alt Goes Mainstream to learn more about how Dynasty, one of the largest wealth management platforms in the US ($60B+), thinks about alternative investments.
Matt Hougan, CIO, Bitwise
Alternative yield - non-traditional investments that produce income - will be a primary focus of investors desperate to keep pace with high inflation.
In my area of focus - crypto - increased regulatory clarity will be a surprising catalyst for the next great bull market.
You can listen to Matt’s podcast here on Alt Goes Mainstream to learn more about how one of the founding fathers of the ETF industry sees a similar evolution with crypto.
Adam Draper, Co-Founder & MD, Boost VC
Bored Ape Yacht Club with finance a 3D animated movie.
Bitcoin will be on the balance sheet of 10 countries.
Comic books will grow large enough for institutions to own.
I think the message for Alts space will be "International" - country focused trading cards, comic books and asset classes.
You can listen to Adam’s live podcast here on Alt Goes Mainstream to learn more about how one of the first investors in Coinbase looks at the evolution of the crypto market.
Kelly Rodriques, CEO, Forge Global
We expect to see a lot more data-driven investing in the space and the emergence of more data-driven funds offering index-like opportunities to invest in private company stocks and alternatives.
We anticipate more and more private companies engaging in programmatic liquidity pre-IPO. More companies will embrace liquidity programs to reward employees and keep them motivated, giving employees the opportunity to sell some portion of their holdings through a company-sponsored program. For those private unicorns that have employees who have worked there for 8-10 years or more, those companies increasingly want their employees to be able to harvest some of the equity value. That will become more of a standard in 2022. And liquidity programs themselves will evolve – and we expect to see more of a market-based auction format where people can sell their private shares at what the market will bear.
We may see different types of investors, particularly wealth and family offices actively engaging in the private markets. We’re expecting to see more managed investors coming into the space.
You can listen to Kelly’s podcast here on Alt Goes Mainstream to learn more about how private markets are evolving into the new public markets.
Bill Kelly, CEO, CAIA
2022 financial markets will likely experience greater bouts of volatility as they digest more constrictive monetary policies and rising interest rates, while sorting out a new normal for inflation and employment in a post-COVID world. This will test the resolve of all investors who need to understand their risk tolerance and diversify across uncorrelated risk premia, while remaining fully invested to meet their long-term goals.
You can listen to Bill’s podcast here on Alt Goes Mainstream to learn more about the importance of educating allocators on alternative investments and the importance of being a fiduciary.
Artem Milinchuk, Founder & CEO, FarmTogether
At least one alt company will go public. Either Yieldstreet or Cadre/Fundrise.
We'll see more niche alt platforms emerging. I want to give a shoutout to Sloika.xyz, an OpenSea but just for high quality photographs.
Not really a prediction as it's happening already but more institutions moving seriously into alts in all shapes and forms.
You can listen to Artem’s podcast here on Alt Goes Mainstream on why everyone should invest in farmland.
Samir Kaji, Co-Founder & CEO, Allocate
In 2022, the role of alternative products will increasingly become a key staple of asset portfolios across all investor profiles. This will be driven by both the expansion of alternative product types and the continued push toward mass market accessibility of products such as venture capital, private equity, and crypto-assets. While not specific to 2022, these products will ultimately cease to be viewed as "alternative assets."
You can listen to Samir’s podcast here on Alt Goes Mainstream to learn more about why emerging managers are the future of VC.
Daniel Vogel, Co-Founder & CEO, Bitso
I'm guessing the most exciting thing in 2022 is going to be the growth of web3's infrastructure, business models, and global mindshare. Excitement around web3 will eclipse crypto prices next year and much of the focus will be on BUIDLing instead of mostly HODLing.
You can listen to Daniel’s podcast here on Alt Goes Mainstream about the ways in which crypto is a useful tool for economic empowerment, particularly in countries with high inflation.
Michal Cieplinski, CBO, Pipe
2022 will be the continued rise of alternative asset classes, such as recurring revenues, and further broad acceptance of crypto as main fiat currencies' alternative. Pipe will play a crucial role in bringing recurring revenues as an asset class into the main stream with further global and sectoral expansions. The world of finance has never been so exiting!
You can listen to Michal’s podcast here on Alt Goes Mainstream about how recurring revenue is a new asset class being unlocked and productized for institutional investors.
Chris Bruno (President) & Rob Petrozzo (Chief Product Officer), Co-Founders of Rally
(Chris) In 2022 I would anticipate the continued acceptance of collectibles as an asset class and diversifier in light of the inflationary environment, as well as the convergence of physical and digital collecting, with NFTs both supporting and enhancing the experience for their physical counterparts and vice versa. This includes (1) NFTs acting as a source of truth for establishing provenance and record keeping, (2) NFTs enabling access to unique experiences, loyalty programs, and investing opportunities, and (3) enhanced platform portability and parity between the digital and physical environments where collectors interact.
(Rob) There’s no going back to 2019 at this point. The new class of investor is activated quickly by word of mouth, they are in a constant search for alpha, and they invest with intent. Speed and intuition can keep wining vs. long-form fundamentals in the classical sense as all 3 of those pieces continue to converge in 2022 with alternative assets in the forefront. The old guard will still find gains, but the 21 year old who can spot trends, activate community and pivot quickly will continue to win, particularly in times of volatility. They've proven that a high risk tolerance can be a tool when coupled with discipline.
You can listen to Chris and Rob’s podcast here on Alt Goes Mainstream about how they’ve turned culture into an investable asset.
Slava Rubin, Founder, Vincent
Sports card as an industry will see the most dramatic year over year growth of any of the asset classes and the first $10M sports card transaction will be completed.
Layer 1 protocols (i.e. Bitcoin, Ethereum) as a collective will see awesome growth, but individual layer 1s will have wild rides.
With interest rates going up, debt and real estate funds will become more fashionable than the last few years.
Physical and digital art will have a back and forth battle for most expensive art piece sold. This will inspire more people to ask for the digital twin (NFT) to authenticate real life assets.
Equity crowdfunding meets web3 will be the next land grab. This will start small, but have bigger implications in the years to come.
You can listen to Slava’s podcast here on Alt Goes Mainstream about how he’s building the on-ramp to alternative assets with Vincent.
Anthony Zhang, Founder & CEO, Vinovest
We will see more physical assets like gold, real estate, wine, art, etc. enter the metaverse. Investors will have both physical and digital ownership over the asset, giving them both store of value benefits as well as increased liquidity and transparency.
You can listen to Anthony’s podcast here on Alt Goes Mainstream about how wine is becoming an investable asset class thanks to the creation of investment platforms like Vinovest.
Nelson Chu, Founder & CEO, Percent
Market size will continue to increase but due to greater adoption from institutional investors instead of retail, as structures begin to evolve and mirror what institutional investors tend to expect.
Retail will top out (may be a 2023 thing but still wanted to flag it here) as macro headwinds lead to losses that may temper Retail demand as they realize the complexities or challenges of what they’re investing in.
Consolidation in the industry as more platforms get acquired with larger, better funded platforms taking down smaller platforms with subpar portfolio performance but have teams with domain expertise.
Asset classes become more and more esoteric as niches pop up that develop into their own verticals in their own right, spurred by VC investments into what they think is the “next great untapped market.”
You can listen to Nelson’s podcast here on Alt Goes Mainstream about how he is transforming private debt markets.
Tom Jessop, President of Fidelity Digital Assets
Successive waves of institutional adoption of crypto as an investment will happen faster and faster. Ethereum will be the next cryptoasset to catch the wave of successive institutional adoption from investors. Upgrades to Ethereum’s protocol and its use cases for DeFi make it an interesting asset for institutional investors.
You can listen to Tom’s podcast here on Alt Goes Mainstream on the power and promise of Web3 and building a crypto business within an $11 trillion AUM financial institution, Fidelity.
Alokik Advani, Managing Partner of Fidelity International Strategic Ventures
The future of Alts is at the cross section of hyper personalisation and multi-asset - investors will be able to choose all aspects - from duration, to wrapper, to the range of assets that sit within it, including traditional assets (equities, bonds), traditional alts (PE/VC), new alts (collectible, wine, art, NFTs) and digital assets (crypto) - all personalised based on their tastes and preferences.
You can listen to Alokik’s podcast here on Alt Goes Mainstream with his portfolio company founder, Steffen Pauls of Moonfare, on why they believe in the future of retail distribution in alts.
Steffen Pauls, Founder, CEO, Moonfare
As deployment time of capital has reached new highs (down from 4 years to 2-3 years in many cases) I expect many established managers / GP to come back fundraising in 2022. The market place will be quite crowded and for some players I could see fairly prolongated fundraising periods.
Manager selection remains key.
The revolution of "Private Equity goes retail" will continue and accelerate even further in 2022. We will see an enormous inflow of money from private individuals into private markets and new products launches, such as ELTIF but also semi-liquid products will serve as a catalyst.
Impact investing as well as blockchain / crypto will gain broader acceptance and we will see several (new) fund launches in this space in 2022.
You can listen to Steffen’s podcast here on Alt Goes Mainstream with his lead investor, FISV’s Alokik Advani on why they believe in the future of retail distribution in alts.
Tim Levene, CEO, Augmentum FinTech
2022 will see global regulators engage in a meaningful way with the Crypto industry. Recognising that they can no longer ignore its shift to the mainstream, the continued institutionalisation of the industry will see a framework put in place by some to secure the industry’s long term future. There will be some regulators that continue to seek prohibition but despite this we believe the industry has moved beyond the point of no return. Over time we believe those crypto platforms that engage with pragmatic regulators, will be the long term winners in the space.
Julie Uhrman, Co-Founder & President, Angel City Football Club
A NFT will generate more money for a professional sports team than its game day ticket revenue.
You’ll see another professional sports team go public.
We will have a National Women’s Soccer League (NWSL) game break 1M TV viewers!
Jordi Hays, Co-Founder & CEO, Party Round
Assets are America’s favorite entertainment. $AMC is ironically the perfect example.
NFTs make culture investable, and there will continue to be parabolic surges in demand for cultural assets even in the event of a bear market.
DeFi, NFTs, and DAOs will start to converge—Web3 projects will start to design, combine, and utilize them in interesting ways where together they unlock new experiences and applications that alone they could not.
Seth Spalding, Partner, Nimble Partners
The rise of DAOs as creating pools of capital will change the dynamics around investing in digital assets. Think of this as the inverse version of fractionlization.
Lesley Silverman, Head of Digital Assets, United Talent Agency
In 2022, NFT utility explodes and NFTs become the vehicle for financing, building community around, and distributing all forms of media. The consumer base widens, and new value metrics are created. Projects that are looking for quick cash grabs and that exploit the communities they purport to serve fall flat, while blue chip projects with staying power and longevity demonstrate leadership by putting big wins on the board for the space as a whole.
Social tokens take off in 2022. Don’t sleep on social tokens.
Thanks to all of the experts who shared their views on the world of alts and to all of the readers who have become part of the Alt Goes Mainstream community and engaged with us over the course of the year. Happy holidays and best wishes for a healthy, happy, and exciting 2022!
What predictions do you have for the future of alts in 2022? Feel free to share them with us here or on Twitter @GoesAlt.