Some experts believe bitcoin is due for a sharp decline in the coming months.
As of November, the price of bitcoin had reached an all-time high of about $69,500.
As of this writing, it’s hovering around $36,783, down about 50% from its peak. A loss of 20% or more from recent highs is considered a bear market by Wall Street, but it’s important to remember that bitcoin is infamous for its volatility.
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Rise and fall of Bitcoin
An academic at Sussex University believes that bitcoin will fall as low as $10,000 in 2022, erasing all of its gains from the past year.
“If I were an investor now, I would consider going out of bitcoin soon since its price will definitely plummet next year,” Carol Alexander, professor of finance at Sussex University, remarked.
According to her, bitcoin has “no fundamental value” and is more of a “toy” than an investment, thus, she’s pessimistic about the currency.
See also: Three Ethereum competitors are growing at an unprecedented rate, outpacing Ethereum.
Alexander anticipates a recurrence of the past. In 2018, bitcoin plummeted close to $3,000 after soaring to a peak of nearly $20,000 a few months earlier. More and more institutional investors are getting into the cryptocurrency market.
Bitcoin is just a bubble
According to Todd Lowenstein, chief equity strategist of Union Bank’s private banking department, “without question, Bitcoin’s price chart appears to match many past asset bubbles and busts, and is carrying a ‘this time it’s different’ narrative exactly like other bubbles.”
Bitcoin is often cited as a way to protect against rising inflation due to government stimulus programs. According to Lowenstein, a more hawkish Federal Reserve might dampen bitcoin’s prevailing winds.
Bitcoin will experience more regulation
According to Nicholas Cawley — Strategist at DailyFX, Bitcoin will experience more regulation, there will be higher intensity and speed to the baseline story from 2021, including regulatory guidelines from government agencies, increased adoption, and the “will they, won’t they” announcement of bitcoin and Ethereum ETFs.
In addition, more investors and asset flows will enter the bitcoin market in 2022 as it becomes a more established asset class.
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This year’s top 20 cryptocurrencies by market capitalization will likely change frequently, as various altcoins compete for spots with some of the more well-known tokens on the list. Bitcoin is likely to preserve its position as the top crypto while its market domination may shrink, especially when Ethereum switches over from proof-of-work to proof-of-stake.
NFTs will open up new markets
Mark Basa — HOKK Finance’s Global Brand and Business Manager, think that soon, there will be an influx of new NFT studios, fueling the growth of this exciting new market.
Because they aren’t familiar with this new fad, brands will likely outsource this work, but they will need to be involved if they want to establish their street credibility.
Rather than launching tokens, NFTs will be used to raise money for crypto initiatives by selling collections of NFTs. Metaverse NFTs will debut in 2022, allowing users to buy and display virtual assets such as virtual art in their own metaverse homes via NFTs they can buy and display in the metaverse themselves.
Metaverse NFTs will debut in 2022, allowing users to buy and display virtual assets such as virtual art in their own metaverse homes via NFTs they can buy and display in the metaverse themselves.
Crypto ETFs will have a great time in 2022
Felix Ucchino — CEO of InvestinGoal.com and co-founder of the company expects Crypto ETFs to have a great year in 2022. For many crypto supporters, crypto ETFs are the final gate that will open the floodgates for financial institutions to invest in cryptos.
Liquidity in the crypto market will soar, as a result, boosting the industry as a whole. For the past seven years, crypto EFTs have been in the works. For the first Bitcoin ETF, the Winklevoss twins applied to the Securities and Exchange Commission (SEC) with an ETF proposal. Insufficient liquidity and worries about manipulation and transparency led to its demise.
ETFs are expected to bring in trillions of dollars in Cryptocurrency by 2022, causing the whole Fintech industry to react.
See also: Proof of Stake vs. Proof of Work Explained
Ethereum’s adoption will continue to grow
According to the Co-Founder and CTO of Kuva, Andreiko Kerdemelidis, this year, Bitcoin is expected to go through the six-figure barrier for the first time. Ethereum’s adoption will continue to grow, and the network as a whole will have a lot more DeFi liquidity.
Technology corporations will compete for control of the emerging ‘metaverse,’ which will see decentralized Web3.0 and blockchain technologies take center stage in 2022. More than only virtual reality goods and the virtual worlds they contain, the metaverse encompasses much more.
Online cultural spaces that can be established with centralized technology have the potential to become marketplaces for virtual products and currencies.
There is a growing demand for decentralized technologies that allow for trustless allocation and purchase of virtual commodities, which will lead to the creation of virtual goods that have a real-world impact. The holder of a VIP ticket to a concert or the owner of real-world products can both benefit from NFTs.
The emergence of DeFi’s decentralized securities is another trend that we may expect to see. Regulations have been responding for some time to the prospect that digital tokens (such as the ERC20 standard) on a public decentralized network like Ethereum could replace or improve traditional stocks.
The early ‘version 1’ decentralized cryptocurrency incumbents will be challenged by new crypto asset networks with new business models, which will improve speed, security, and transaction costs, as well as traditional financial products and services. DEX will overtake centralized exchange volume (CEX) as the underlying networks, particularly Ethereum, improve.
Blockchain transactions will be faster
CEO of TeamBlockchain, Jonny Fry, predicts that blockchain-powered platforms, according to the skeptics, would be unable to handle massive numbers of transactions, a typical critique, and argument.
Mastercard processed $6.3 trillion in transactions in 2018, while Ethereum processed $6.2 trillion in transactions, according to a report on the 22nd December 2021 Digital Bytes.
To encourage even more institutional interest in blockchain technology, we may expect to see quicker and more transactional-capable systems enabled by the technology by 2022.
Stablecoins and Central Bank Digital Currencies (CBDCs) will be issued in the near future. On the eve of the Winter Olympics in Beijing, China, the world’s second-largest economy, will unveil its digital currency, the Yuan.
Due to the Chinese government’s desire to maintain ultimate control over the system, the CBDC will not adopt Blockchain technology. CBCDs will also be tested and launched in other nations during the year 2022.
Despite the fact that most CBDCs will be geared toward the wholesale sector, there is still room for a variety of retail-focused stablecoins.
2022 will be the year of digital assets
Michael Stimpson, partner at Saltus, predicts that digital assets will be king in 2022. Non-fungible tokens (NFTs) are providing a route for individuals to own and trade assets more cheaply and quickly than ever before, thanks to the power of blockchain technology, which is opening up new ways to store and trade digital and physical assets.
See also: Crypto Bear Market; When to buy and when to sell.
As a result of factors such as breakthroughs between digital and analog worlds and lockdowns that forced individuals to spend more time at home and online, sales of NFTs jumped from $100 million in 2020 to $22 billion in 2021.
Thus, in 2022, we may expect considerable growth in the NFT sector, thanks to digital asset exchanges like Coinbase and Opensea developing and expanding their services to facilitate greater trading in digital collectibles.
When it comes to NFT asset classes, digital collages and Alien Crytopunks dominated the market in 2021, making them the most widely known. As leading fashion labels begin to experiment with NFTs and accept crypto as payment for both their physical and digital creations, we predict this industry to continue to expand in popularity over the coming year.
However, we believe that gaming will be the NFT market segment to keep an eye on in 2022. ‘Play to Earn’ systems like Axie Infinity, Decentraland, and CryptoKitties are expected to continue and expand in popularity in the future.
‘Axies’ are digital pets that can be bred, modified, and sold in Axie Infinity, for example. In the future, the NFT market will be fueled by gaming platforms that allow gamers to produce and own digital products and extract actual value from them.
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