Bitcoin: forecast for 2022

Well, this question seems a bit redundant, but let’s give a brief overview for those who are just diving into the cryptocurrency market. According to Coinmarketrate.com Bitcoin is a decentralized (digital) currency created by Satoshi Nakamoto in 2009. This new financial ecosystem is created and distributed using blockchain, a decentralized registry database.

Simply put, Bitcoin is a peer-to-peer system of electronic money (the words of Satoshi himself). Due to its decentralization, it does not involve third parties or banks. All transactions are verified and protected by people who manage the network on their devices, which makes it direct and limitless. A financial ecosystem for people.

We could have gone on and on about Bitcoin, but we just wanted to paint a picture to create a foundation for newbies to understand. As for the BTC, the main conclusions are as follows:

• Bitcoin is the first cryptocurrency, as well as the largest by market capitalization;
• On November 10, 2021, the BTC reached its historical maximum – 69,044 US dollars;
• Cryptocurrencies (and, accordingly, Bitcoin) are known for their volatility and go through numerous cycles of “booms and busts”;
• Bitcoin is also known for using blockchain, a decentralized distributed database – a registry (ledger) that works on a network of devices (computers).

Bitcoin has been in the spotlight due to the constant growth of its price. Its price has been on a roller coaster ride since its inception. After all, a product whose price has increased from $1 in 2011 to $69K in November 2021 attracts attention in the long run. Despite the fact that Bitcoin is not a tangible commodity, it is valued so highly due to supply and demand, production costs and scarcity.

In November 2021, the total market value of Bitcoin will be $1.11 trillion, which is a staggering amount considering that it is still in the early stages of adoption and implementation.

– PlanB (@100trillionUSD) December 12, 2021

Bitcoin Price History

The price of Bitcoin is the most discussed topic of cryptocurrency. People who know nothing about cryptocurrency are faced with headlines like “Bitcoin has reached a new historical high”, but also with headlines like “The price of Bitcoin has collapsed”. It is this extreme volatility that makes this crypto asset the subject of numerous disputes.

But did you know that until 2013 (two years after its creation) bitcoin could not rise above $25? In the same year, the price of BTC reached $1000. From $25 to $1000 in just one year! Such market development was unprecedented, and the snowball effect did not take long to wait. It has become much easier to get Bitcoin, since Anycoin Direct was created in 2013, and after it, attracting media attention.

The breakthrough year for BTC was 2013, when the price rose from $13 to $1,200. Rumor has spread information about a new type of asset, and the possibilities of acquiring and storing Bitcoin have become much easier. Bitcoin has become popular among nerds and early investors.

The following year was also important for Bitcoin as it experienced its first major crash. Due to the bankruptcy of Mt.Gox, BTC fell from $1,241 to $91. These extreme fluctuations subsequently became a well-known aspect of the cryptocurrency market, and led to the emergence of terms such as “HODL”. This was not the last collapse for Bitcoin.

It all started in 2017, when a huge influx of buyers, institutional money and the media turned the crypto asset from a boring niche hobby into a financial phenomenon. The price has increased from $ 707 to almost 17 thousand. Crypto brokers and exchanges could not cope with the traffic, and record high after record high was full of headlines.

It was this year that Bitcoin became mainstream, and, like in 2013, when its breakthrough occurred, it soared to the top too quickly. The asset has fallen. From the highest point in 2017, to the lowest point in 2018: BTC fell from 16 thousand, to almost 3 thousand. Again, these boom and bust cycles have started to define cryptocurrency and have become an important aspect of people’s investment strategy.

What to expect from Bitcoin in 2022?

Unfortunately, no updates or developments are planned for Bitcoin in 2022. Bitcoin is managed differently from currencies like Ethereum and Cardano, where the roadmap is determined almost by a board of directors similar to the company. This makes the asset more decentralized, but also slows down its renewal. Therefore, we need to look at what experts are saying and focus on the economic expectations of 2022.

Global inflation

Despite the fact that Bitcoin has fallen heavily and the PlanB model has been downgraded to PlanC, the prospects for the coin are still extremely positive. The Bitcoin ETF received approval in 2021, which means that US financial regulators are not opposed to Bitcoin compared to China’s ban.

Given the rise in inflation and the limited supply of BTC (against the unlimited supply of fiat), companies, institutions and investors are showing great interest in Bitcoin. Mike McGlone, an analyst at Bloomberg Intelligence, delves into this topic in the recently published Crypto Outlook 2022 forecast. In this forecast (published by Bloomberg Intelligence) McGlone describes in detail the current situation in America:

“Some normalization of stock market yields and the continued decline in U.S. Treasury bond yields may add luster to Bitcoin and Ethereum in the portfolios of large investors”.

McGlone believes that the revolutionary developments around NFT and stablecoins will lead to the fact that in 2022 the American public will accept cryptocurrency even more. According to his analysis, the current drop is not the end of a bull market, but rather part of a “consolidating bull market.”

Bitcoin has “survived” the problems associated with China and energy consumption, and, according to McGlone, the question is not whether it will reach 100 thousand dollars, but when it will reach this mark. He mentions that the 40k mark is considered as “good support”, and $70k is considered as “initial resistance”.

“$100,000 #Bitcoin, $50 #Oil, $2,000 #Gold? Prospects for 2022 in 5 charts. The peak of commodities and the decline in the yield of long treasury bonds indicate the risk of a resurgence of deflationary forces in 2022, which will have a positive impact on Bitcoin and gold.

Bitcoin seems to be on a trajectory towards 100,000… A suspended, adjusted and updated bull market is how we see Bitcoin in 2022… We think it’s more a matter of time, in particular, because of the economic fundamentals of growing demand versus decreasing supply.”, – said McGlone.

It seems that in 2022 Bitcoin will be on everyone’s lips, and especially in investment portfolios. According to a survey conducted by Natixis Investments, 28% of large enterprises in the United States have increased their share of cryptocurrencies. Visa, the world’s largest credit card company, said that “every bank should have a cryptocurrency strategy in 2022.”

With the advent of Bitcoin ETFs, more and more companies are adding BTC and cryptocurrencies to their balance sheets. An example is Tesla, which holds Bitcoin as part of its investment strategy, which forced the US tax service to openly discuss the framework for such designs.

The price forecast of 100 thousand is often mentioned. Some predict that BTC could reach 100K in 2023 or later, some mention 2022. Jurrien Timmer, director of Fidelity Investments, claims that the $100,000 threshold is just around the corner. Kiana Danial, author of the book Cryptocurrency Investing For Dummies, expects volatility in the short term, but growth in the long term, where again the milestone of 100 thousand dollars is inevitable.

Conservative forecasts

All of these forecasts are incredibly bullish, but let’s face it: many people were expecting PlanB’s 98K forecast for the end of the year. The price of the king of the crypto market (and cryptocurrencies in general) is developing so fast that it is sometimes useful to show several points of view. After all, there are some experts with a more “bearish” view of things. So we also explored more nuanced alternative opinions on what to expect in 2022. Let’s figure it out.

Will Harborn is CEO of DeversiFi, a DEX (decentralized exchange) where tokens can be exchanged anonymously. Harborn sees two options for the development of events in the short term:

1. There will be a market correction before it continues its trajectory.
2. Ethereum will overtake Bitcoin, indicating the usefulness of the current number two in the DeFi space.

“We are in a bubble,” he said. “There have been a lot of bubbles in the history of cryptocurrencies, and this is not necessarily a bad thing, it’s because real value is being created, and people are speculating on this, and everyone is getting ahead of themselves.”

The CEO does not want to attach forecasts to his quote, stating that anyone who tries to predict the market is wrong.

Fred Shebesta, Co-founder Finder.com , is more optimistic, but believes that Bitcoin will stabilize by the end of the year. He notes that the crypto bull run will continue in 2022 and that especially the lesser-known altcoins will flourish next year. However, he predicts that after reaching the ATH territory, Bitcoin will experience a cooling, predicting that it will drop to $32K, where it will move sideways for some time.

“I don’t think $69K was the top for this decline cycle.  If 69K were the top, then with a typical bear market 80 percent drawdown, the bottom would be at 14K… below 2017 ATH ($20K) and below 200 WMA ($18K). Nope, this has never happened and, IMO, never will.”

Obviously, there are many points of view on Bitcoin. Most of them are quite positive now that many countries and institutions are considering this system instead of fighting it, as China is doing.

The promotion will continue, economic instability will only increase, and regulation will increase, which means that Bitcoin will definitely move in one direction or another.

The development of the Lightning network and real-world use cases will also play an important role in the rapid adoption outside the crypto space. So let’s see where next year takes us.