Bitcoin still holds the most popular bitcoin around the world. This crypto coin holds the largest market capitalization among all other coins. Although, 2021 was a volatile year for bitcoin when it reached its highest level of $68,000 in November. It faced many ups and downs during 2021. However, the last month of 2021 was somewhat disappointing when the price of bitcoin fell. So as 2021 is past now, investors are now more concerned about bitcoin predictions in 2022.
If we analyze the performance of Bitcoin over the past five years, it has a growth rate of 4,900%. Even though in 2021, it faced volatility, it still managed to grow by over 60%. That means a person who invested £1000 at the start of the year must have more than £1600 at the end of the year.
The high ups and downs in the cryptocurrency dealings in 2021 were due to many factors. Many countries crackdown on cryptocurrency dealings. Whereas some investors condemned cryptocurrency dealings. However, some even adopted dealing in this currency. Whereas endorsements from Elon Musk were a positive development for crypto in 2021.
Another major achievement was from Paypal which enabled hundreds of millions of retail investors to deal in cryptocurrency. Coinbase was the first major crypto company that went public in April which was also a major development.
There are mixed predictions about the future of bitcoin in 2022. According to Carol Alexander Professor of Finance at Sussex University predicts that crypto will wipe out all the gains in 2022 with a market value as low as $10,000. She thinks of bitcoin as a toy and nothing more as it has no fundamental value. She reminds the bitcoin crash in 2018 when it tumbled close to $3000 after reaching a high value of $20000.
However, others think that it will continue its volatility pattern in 2022. Kate Waltman, who is a crypto specialist and New-York based public accountant, is very optimistic about bitcoin performance in 2022. He is of the view that it will hit $100,000 as many knowledge educators in the space are predicting.
The author of “Cryptocurrency Investing for Dummies”, Kiana Danial also predicts short-term volatility and long-term growth. Another major breakthrough was the Tweet from Mr.Dorsey, the former CEO of Twitter, who left his job to focus on a blockchain-oriented fintech company was of the view that bitcoin will replace the US dollar.
The CEO of the Kraken while talking to Bloomberg pointed out that cryptocurrency is like “Buy-and-hold-investment”. He stressed that people should plan investment in crypto on a long-term basis. People need to understand the fact that they should invest and then wait for the results for at least five years. Prices in this sector are so volatile that these change daily and weekly basis. Therefore, short-term investment is not feasible.
According to Ric Edelman, the founder of the Digital Assets Council of Financial Professionals, in his prediction for 2022 stated that by the end of 2022, around 500 million people around the world will own this currency. The view was further supported by Flori Marquez, founder of CoinTelegraph, BlockFico, who stated the worldwide adoption of cryptocurrency will increase in 2022. That is because of the clarity in understanding this sector and improved regulatory.
Visa has also entered into this market by partnering with 60 crypto platforms which will enable consumers to spend crypto at 80million merchants worldwide. It also plans to launch a crypto-linked which will further ease the spending of crypto to consumers. The Visa head pointed out that the scope and scale of the crypto business of Visa have seen dramatic growth over the past years.
If we analyze the reaction of governments and central banks around the world, we note that they are still unsure as they are in the early stage of getting a solid grip on crypto. However, the policymaker at the Bank of Englan, Andrew Bailey has warned people of dangers that are involved in investing in such assets. The Financial Conduct Authority in England has also warned of such risks relating to investment and lending in crypto. They highlighted a key fact stating, ” If consumers invest in these types of products, they should be prepared to lose all their money.”
However, the Bank of England and the Federal Reserve in the US are also planning to launch their own digital coins. China has already cracked down on crypto dealing and mining.
Therefore, anyone who is planning to invest in such currencies must understand the reality that they can lose all their money as it is unregulated, unprotected, and highly volatile.
Also Read: UK FinTech Investment Sector