From bitcoin crashes to regulatory cracks: Analysts release their top crypto predictions for 2022

KEY POINTS Bitcoin has grown by almost 70% since the beginning of 2021, driving the entire crypto market to a combined total of $ 2 trillion. But improved regulatory analysis and greater price volatility have dampened bitcoin prospects recently. Some experts believe that bitcoin is due to a sharp decline in the coming months. All things considered, bitcoin has had a very good year. Digital revenue has increased by almost 70% since the beginning of 2021, driving the entire crypto market to a combined total of $ 2 trillion. The year saw the first major crypto company come out publicly with a Coinbase debut in April, an increase in partnerships from Wall Street banks like Goldman Sachs, and the approval of the first US trading platform linked to bitcoin. However, high-regulatory analysis and high price volatility have dampened bitcoin prospects recently. And experts warn that the market is likely to collapse. Growing crypto development such as shared funds by private and private organizations "is likely to be the fastest growing crypto region," said Bryan Gross, network manager at the crypto ICHI platform. DeFi aims to re-create traditional financial products outside of intermediaries, while DAOs can be considered as a new form of online community. The total amount of money invested in DeFi services exceeded $ 200 billion for the first time this year, and the expert project seeks to grow further by 2022. DeFi is part of a broad tech trend known as Web3. The move to Web3 requires a new, expanded internet duplicate that includes blockchain technology and cryptocurrency as unofficial tokens. It has already found skeptics in the likes of Elon Musk and Jack Dorsey, however. ‘Great year in the field of governance’ Regulators have shifted their focus to cryptocurrencies this year, with China completely banning all crypto-related activities and U.S. authorities. they criticize certain aspects of the market. Analysts expect the regulation to become a major issue by 2022 in the sector. "2022 will be a big year ahead of the judiciary, no doubt," said Luno's Ayyar. "Interest in various governments, especially the US, to introduce legislation in the crypto space has not been high." Ayyar said he expected to see some clarification in the "gray area" of cryptocurrencies other than bitcoin and ethereum, the SEC said they were not securities. Blockchain company Ripple closes horns with US watchdog over XRP, the cryptocurrency most closely associated with it. The SEC says XRP is unregistered and that 1.3 billion tokens are being illegally sold by Ripple and two of its executives. For its part, Ripple states that XRP should not be considered security. With the coming year already looking like another era of roller-coaster for digital currencies, CNBC is looking at major analysts ’predictions. Crypto crash Some experts believe that bitcoin is due to a sharp decline in the coming months. The cryptocurrency rose to nearly $ 69,000 records in November. It now sits below $ 50,000, down about 30% from its peak. Wall Street Intelligence defines bear markets as a 20% or higher decline from the recent rise, but it is worth noting that bitcoin is famous for its volatility. Carol Alexander, a professor of finance at the University of Sussex, said she expected bitcoin to rise to as low as $ 10,000 by 2022, almost ending all of its profits over the past year and a half. "If I were an investor now I would think about getting out of bitcoin soon because its value is likely to crash next year," Alexander said. His bearish call is based on the notion that bitcoin “has no basic value” and acts as a “toy” in addition to investing. Alexander has warned against repeated history. In 2018, bitcoin dropped to about $ 3,000 after rising to about $ 20,000 a few months ago. Proponents of cryptocurrency often claim that things are different, as many institutional investors are jumping on the market. "Without a doubt, the Bitcoin price chart seems to track most of the historical and explosive commodity bubbles and holds the story 'now different' like other bubbles," said Todd Lowenstein, chief strategist of equity for the private bank of the Union Bank. A common case of bitcoin investment is that it serves as a barrier to inflation caused by government incentives. Lowenstein said there was a risk that an additional hawkish Federal Reserve could blow air into bitcoin sails. "Goldilocks' conditions are depleted and liquidity is depleted and will equally affect the most valuable asset classes and market speculators in cryptocurrencies," he said. However, not everyone is confident that the crypto team will end by 2022. "The biggest risk factor, namely [quantitative tapering] by the Fed, has already been determined and its price is already high," said Yuya Hasegawa, a crypto market analyst at Japanese digital asset. Bitbank exchange. The first place for bitcoin ETF Major developments crypto investors are looking at in 2022 the approval of the first bitcoin trading fund in the United States. Although the Securities and Exchange Commission has highlighted the launch of the ProShares ’Bitcoin Strategy ETF this year, the product is tracking bitcoin futures contracts rather than giving investors direct exposure to the cryptocurrency itself. The future is a financial outflow that obliges an investor to buy or sell an asset at the latest date and at the agreed price. By tracking future prices instead of bitcoin itself, experts say, ProShares' ETF could be very dangerous for novice traders, many of whom are invested in crypto. "The Bitcoin Futures ETF launched this year is widely regarded as unsuitable for sale given the high cost involved in finalizing contracts of about 5-10%," said Vijay Ayyar, vice president of business development and global expansion. on the crypto Luno switch.