From a possible collapse to the growing wait for regulation. Experts expect a busy 2022 for cryptocurrencies in 2022. Bitcoin has had a pretty good year, climbing by about 70% in this 2021 and pushing the entire cryptocurrency market to a value well above 2 trillion dollars (in November the 3 trillion dollars in total value was also touched before the sell-off. ).
2021 also saw the first major cryptocurrency company go public with the Coinbase debut in April, and increased participation by Wall Street banks like Goldman Sachs, and the approval of the first US ETF linked to bitcoin futures.
However, some experts believe that Bitcoin is set to decline sharply in the coming months. On the opposite front, the bulls see the rise continue with the $ 100,000 target echoing again (there were those who indicated it as a target already by the end of 2021).
The theses in favor of a collapse of cryptocurrencies
Carol Alexander, a professor of finance at Sussex University, expects the Bitcoin goes down to $ 10,000 in 2022, virtually wiping out all of his earnings over the past year and a half. “If I were an investor now, I would think about exiting bitcoin soon because its price will likely drop next year,” Alexander told CNBC. The bearish way is based on the notion that bitcoin “has no fundamental value” and it serves more as a “toy” than as an investment.
Alexander warns that bitcoin could plummet, as it has done in the past, after a big rally in the price. In 2018, bitcoin plummeted close to $ 3,000 after rising to a high of nearly $ 20,000 a few months earlier.
Investors are also worried by the repetition of downward shocks, the latest this month with the bitcoin sold over 20% in one hour on Saturday 4 December. Inserting cryptocurrencies in the wallet even in a small percentage means putting up with a quite marked increase in volatility.
And the bullish ones
On the other hand, many are convinced that the cryptocurrency party will not end in 2022. “The biggest risk factor, namely the tapering by the Fed, it has been decided and probably priced already, ”said Yuya Hasegawa, a crypto market analyst at the Japanese exchange Bitbank.
In general, the cryptocurrency industry has evolved and while bitcoin’s market share has declined, other digital currencies such as Ethereum they play a much bigger role. This is what analysts expect to continue seeing over the next year. Alexander of Sussex University reported ethereum, solana, polkadot, and cardano as coins to be observed in 2022.
“As retail investors begin to realize the dangers of trading bitcoin, especially on unregulated locations, they will move on to other blockchain-owned coins that actually serve an essential and pivotal role in decentralized finance,” the professor said.
Among the expectations for the new year there is also the possible approval of the first bitcoin spot ETF in the United States.
Nodo stablecoin
Ma in any case, 2022 will be an important year on the regulatory front. Experts say another key area regulators are likely to focus on next year is stablecoins, tokens whose value is tied to the price of existing assets such as the US dollar. Tether, the largest stablecoin in the world, is particularly controversial as there are concerns that it holds enough assets in its reserves to justify its link to the dollar.