Irrespective of the challenges encountered by the world’s largest cryptocurrency this year, overall it was a great year for Bitcoin which is currently trading at $47,736.40, as of the time of drafting this article, and more than double what it closed the year 2020 with. Bitcoin is up 70 percent from the close of last year and was a major factor that pushed the total cryptocurrency market capitalization to $2 trillion.
This year saw Coinbase, the first major crypto company go public, increased participation in Bitcoin from Wall Street banks like Goldman Sachs, adoption of Bitcoin as a legal tender, adoption as a means of payment, and the approval of the first US exchange-traded fund linked to Bitcoin.
A lot of predictions were set for Bitcoin this year and while only a handful of these predictions happened, a lot more of them didn’t as a result of many factors that could have in no way been predicted. Bitcoin has had consecutive series of ups and downs, soaring as high as $69,000 and as low as below $30,000 this year.
While some predictions that came this year were forecasted to happen in 2022, some others were forecasted for this year. For instance, analysts forecasted that Bitcoin would hit $70,000 before the year ran out. While this did not happen, Bitcoin got to an all-time high of $69,000. With less than three days to the year’s end and Bitcoin trading below $50,000, it’d take more than Elon Musk and a miracle to reach this prediction.
The year 2022 is only a few days, a few hours, away and analysts have begun to make predictions for Bitcoin. Before we look at some of these fresh predictions, let’s examine some scheduled for 2022 that were made within this year.
In June this year, following massive fluctuations that saw Bitcoin dip, billionaire venture capitalist and Bitcoin enthusiast and investor Tim Draper forecasted Bitcoin reaching $250,000 by the end of 2022 or the beginning of 2023. The billionaire made his prediction while he was on CNBC’s Make It. “I’m going to be right on this one”, he said. The billionaire first made his seemingly outrageous prediction in 2018. As of that time, Bitcoin was trading for about $8,000 and didn’t seem like it could do much. Bitcoin has reached an all-time high of $69,000 since his prediction and although it’s had some setbacks, Bitcoin is still expected to surge beyond this. Tim Draper is a strong advocate of Bitcoin and believes that the coin will be “much more in use by then (2022-2023; the time of his prediction for the coin’s surge)” and that this would be one of the major reasons for its surge.
“I’m either going to be really right or really wrong but I’m pretty sure that it’s going in that direction”, he mentioned while talking about his prediction. “Give it a year and a half and retailers will all be on Open node (a Bitcoin payment processor), so everybody will accept Bitcoin”, he added.
His prediction might already be taking shape as some notable companies have already adopted Bitcoin as a means of payment for their goods and services. Tesla, for instance, started accepting the currency as a means of payment for its electric vehicles before it put a stop to that out of environmental concerns. Other companies that already accept Bitcoin as a means of payment and on behalf of their customers, either directly or indirectly include – PayPal, Microsoft, Whole Foods, Starbucks, Home Depot, Overstock, Apple Pay, Google Pay, Samsung, Pay, etc.
Another notable prediction for Bitcoin against the next year that came this year was that of a Standard Chartered research team. The team, in September, predicted Bitcoin reaching $100,000 by early 2022. The prediction came shortly after Bitcoin’s crash following El Salvador’s adoption. The team also predicted that Bitcoin could be worth as much as $175,000 on a long-term basis.
Some fresh predictions for Bitcoin in 2022 include;
Bitcoin May Experience A Sharp Decline In Price
Some experts are of the opinion that Bitcoin would experience a sharp decline in the coming months. They opine that 2022 would be another roller-coaster type of year for Bitcoin, and cryptocurrencies in general. Bitcoin and other cryptocurrencies are characterized by being extremely volatile and this year showed how volatile cryptocurrencies can be.
A prediction by Carol Alexander, a professor of finance at the University of Sussex, said Bitcoin would tumble as low as $10,000 and wipe out the gains recorded in the past. A bit extreme if you ask us but everyone has seen how volatile Bitcoin can be in the past, so her prediction cannot be exactly ruled out.
Her prediction stands on the basis that Bitcoin has no value and has no backing. This completely reminds us of what Donald Trump said months ago, that Bitcoin is a scam as it is based on thin air.
“If I were an investor now I would think about coming out of Bitcoin soon because its price will probably crash next year”, the University of Sussex professor said.
The Approval Of The First Spot Bitcoin Exchange-traded Fund In The United States Is Predicted For Next Year
This year, the US Securities and Exchange Commission gave approval for the launch of ProShares’ Bitcoin Strategy ETF. Although this is a huge step in the advancement of Bitcoin, the product only tracks Bitcoin futures contracts instead of giving investors direct exposure to the cryptocurrency.
A huge development in the crypto space that investors and enthusiasts are looking out for next year is the approval of the spot Bitcoin exchange-traded fund in the US.
Vijay Ayyar, Vice President of Corporate Development and Global Expansion at crypto exchange Luno said this year that “The Bitcoin Futures ETF that launched this year has been widely regarded as not very retail-friendly given the high costs involved of rolling over contracts which amount to around 5-10 percent. Increasing pressure/evidence… points to a Bitcoin Spot ETF being approved in 2022 mainly because the market is now large and mature enough to support one”.
Grayscale Investments which is the world’s biggest Bitcoin fund has filed to convert its Bitcoin trust into a spot ETF. There are also a handful of other Bitcoin ETF applications currently pending.
Decentralized Finance (DeFi)
Investors are expected to invest hugely in DeFi next year as the crypto industry continues to expand. According to Bryan Gross, a network steward at crypto platform ICHI, decentralized finance and decentralized autonomous organizations are “likely to be the highest growth areas of crypto”. The belief is that DeFi which aims at eradicating middlemen will be embraced more and continue as a bigger trend next year.
According to the University of Sussex’s Carol Alexander, Solana, Cardano and Polkadot are some of the coins to watch out for next year. “As retail investors begin to realize the dangers of trading Bitcoin, especially on unregulated venues, they will switch to … other coins belonging to blockchains which actually serve an essential and fundamental role in decentralized finance. This time next year I predict that Bitcoin’s market cap will be half the combined cap of smart contract coins like Ethereum and Solana or even less”, she said.
2022 Will Be A Year For Regulation
This year saw Bitcoin face huge regulations with the cryptocurrency banned and declared illegal in some countries such as China. According to analysts, the coming year will be one for regulation of Bitcoin and the crypto space. Vijay Ayyar, Vice President of Corporate Development and Global Expansion at crypto exchange Luno said that “2022 will be a big year on the regulatory front, no doubt. The interest from various governments, and especially the U.S., to bring regulation into the crypto space has not been higher”.
Currently, exchange platform Ripple is in a battle with the Securities and Exchange Commission for allegedly being unregistered security and selling $1.3 billion worth of tokens.
Analysts also forecast governments coming for other coins in the coming year.
Which one of these predictions can you relate to or do you find the most interesting? Do you have any personal predictions regarding Bitcoin? Are you already thinking of withdrawing all of your Bitcoin assets as suggested by University of Sussex’s Carol Alexander or do you believe that Bitcoin would reach $100,000 as predicted by the research team at Standard Chartered and close the year 2022 at $250,000 as forecasted by Tim Draper?