Will the price of cryptocurrencies rise, fall, or entice investors with an uncertain future? Will the volatility of Bitcoin continue? Will the role of regulation increase? Which kind of cryptocurrency is the most likely to succeed in the upcoming year?
The future of cryptocurrencies is being predicted by as many analysts as there are.
In 2021, cryptocurrency's appeal didn't diminish. Goldman Sachs started to accept cryptocurrencies. The first significant cryptocurrency to go public, Coinbase, had its debut in April 2021. In October, the first Bitcoin-linked exchange-traded fund in the United States debuted.
The most well-known cryptocurrency, Bitcoin, had a successful year, according to CNBC. Since the beginning of 2021, the digital currency has increased by almost 70%, pushing the total value of the cryptocurrency market to $2 trillion.
First Crypto Prediction: Are We in for an Exciting Climb or a Crypto Crash?
In 2022, cryptocurrency values can drop even more. They shot out to a record high of nearly $69,000 in November, but since then, they have dropped to around $50,000, a decrease of nearly 30%.
Professor of finance Carol Alexander of Sussex University predicts that Bitcoin will fall to $10,000 in 2022, wiping off the majority of its gains over the previous six months.
Some predict a crash in 2022 but not me. The biggest danger issue, according to Yuya Hasegawa, a crypto market analyst at Bitbank, a Japanese digital asset exchange, is [quantitative tapering] by the Fed. He believes it's been decided upon and most likely priced in.
According to Sayantani Sanyal, a number of indicators, including increased business acceptability and increased demand for Bitcoin ETFs, suggest that Bitcoin prices will rise. According to Sanyal of Analytics Insight, some industry analysts believe that Bitcoin will reach $100,000 by the end of 2024, while others believe it will reach that milestone in the first quarter of 2022. According to some, Bitcoin won't increase in value beyond USD $70,000 by the end of 2022.
Second Crypto Prediction: Bitcoin Will Be Adopted by Many More Investors
Crypto forecast: By the end of 2022, more than 500 million people will possess Bitcoin globally, according to Ric Edelman, head of the Digital Assets Council of Financial Professionals, who made this prediction, according to The Ascent. Flori Marquez, co-founder of CoinTelegraph and BlockFi, concurs, attributing increased popularity to better comprehension of the business and more lucid regulations.
#3 Crypto Prediction: It Could Be Approved for the First Spot Bitcoin ETF
Some cryptocurrency investors believe that this year will see the approval of the first spot Bitcoin exchange-traded fund (ETF) in the US, providing investors with direct access to the cryptocurrency itself. ProShares' Bitcoin Strategy ETF was launched last year with approval from the Securities and Exchange Commission; nevertheless, it only tracks Bitcoin futures contracts. However, analysts predict that a Bitcoin Spot ETF will be allowed because the market is now big and developed enough to support it.
Fourth Cryptocurrency Prediction: Toward Decentralized Finance (DeFi)
According to Bryan Gross, network steward of cryptocurrency platform ICHI, emerging crypto innovations like decentralized finance (DeFi) and decentralized autonomous organizations (DAOs) are "likely to be the highest growth areas of crypto." DeFi seeks to replicate standard financial goods in an intermediary-free manner, whereas DAOs may be viewed as a novel form of online community. In 2021, deposits into DeFi services exceeded $200 billion, and in 2022, demand is anticipated to rise.
According to Carol Alexander, investors hoping to profit from smaller segments of the cryptocurrency market in 2022 should keep an eye on the Ethereum, Solana, Polkadot, and Cardano coins.
Cryptocurrency Prediction #5: Regulators Are Watching
In 2022, cryptocurrency regulation is anticipated to be a major concern. According to vice president of corporate development and worldwide expansion at cryptocurrency exchange Luno, 2022 will be a significant year for regulations. Ayyar stated to CNBC that he anticipates hearing more about the legal "gray area" surrounding cryptocurrencies other than Bitcoin and Ethereum. Stablecoins—tokens whose value is dependent on the value of assets like the US dollar—are likely to be of interest to regulators as well. The largest stablecoin in the world, Tether, is in dispute about whether it has sufficient assets in its reserves to support its reliance on the dollar.
Cryptocurrency Prediction #6: The S&P 500 will either underperform or surpass Bitcoin.
Despite the threat posed by the coronavirus to the world economy, 2021 saw notable gains for both Bitcoin and the benchmark index: S&P 500 increased by about 27%, whereas Bitcoin surged by 66% percent.
According to Arcane Research, Bitcoin has behaved like a risk-on asset, and they believe this will amplify stock market behavior. The company predicted that Bitcoin will do better in 2022 if the stock market rises. However, Bitcoin is expected to underperform if 2019 is a red year for the stock market.
Cryptocurrency Prediction #7: Ether Will Beat Bitcoin Once More
In 2021, ether did better than bitcoin, rising 418 percent to 66% for the latter. Analysts predict that either will keep performing well because of the increase in NFT sales volumes. The Ethereum blockchain is still used by the majority of these tokens.
Crypto Forecast #8: The majority of meme coins will vanish
A Dogecoin derivative called Shiba Inu saw a 44,540,000% increase last year. The coin known as Squid, which got its name from the TV show "Squid Game," saw a gain of over 75,000% in less than a week before it vanished.
Crypto Prediction #9: Tether Will Be Overtaken by USD Coin as the Largest Stablecoin
Remaining the biggest Stablecoin based on cryptocurrency worth is Tether.
Cryptocurrency Prediction #10: VIX Increases Affect Bitcoin Value
According to Arcane Research, "Bitcoin's performance was directly impacted by fear in the broader financial markets," even though the stock market did well in 2021.
Increases in the Cboe Volatility Index, or VIX, correlated with declines in the price of bitcoin. According to Arcane Research, market challenges in 2022 may have an impact on the short-term price trend of Bitcoin.
Early 2024 Will See the End of the Bear Market
The cryptocurrency markets are expected to rebound in 2024, according to analysts and investors, following a protracted bad market in 2020. The industry's ability to weather storms and show indications of recovery even in trying times has contributed to this optimistic outlook. As a result, traders and investors should anticipate better performance in the upcoming year, which may result in bigger returns and more liquidity. Furthermore, in 2024, more companies are probably going to enter the cryptocurrency space, which will accelerate the uptake of blockchain technology and virtual currencies.
