Crypto Outlook 2022: Bitcoin at $100,000 or Emperor Without Clothes? | Markets | 05/01/2022

Predictions for the future development of Bitcoin and Co are as different as the crypto universe itself and range from “the next big thing” to “the greatest collective idiocy of all time”.

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After the Federal Reserve turned hawkish towards the end of the year, the crypto market ran out of steam – while other risky assets were largely spared. Also in the new year, many experts consider official monetary policy to be the decisive driver of Bitcoin & Co., reports Bloomberg.

New trends
However, some recognize trends that make the digital currency market less dependent on the macroeconomic environment. On the one hand, this is supported by the commitment of tech giants such as Meta Platforms (formerly Facebook) and Apple in the field of the metaverse. The boost could also come from the so-called non-fungible tokens. Last year, an NFT artwork changed hands at Christie’s auction house for $69.3 million.

The following is the analysts’ view on what to expect in the crypto market after Bitcoin’s 2021 volatile 60% price surge in the new year:

Bullish Bitcoin Technical
“We are long-term bullish on Bitcoin based on our long-term trend-tracking metrics,” said Katie Stockton, founder of Fairlead Strategies. “We expect the long-term uptrend to continue.” A more decisive break to new highs would open the way to around $90,000.

This week, bitcoin was trading at around $46,600, down from just over $46,300 at the end of 2021, nearly $69,000 at the November high, and just under $7,200 at the end of 2021. 2019. “At this time, a corrective phase is still in place,” Stockton says. “However, there are potential signs of near-term downtrend exhaustion.”

Bitcoin has outperformed the broader stock market in 2021

The Fed and the Metaverse
“The No. 1 influencer for Bitcoin and cryptocurrencies in 2022 is central bank policy,” says Antoni Trenchev, managing partner at crypto lender Nexo. “Cheap money is here to stay, which has huge implications for cryptocurrencies” because “the Fed doesn’t have the guts or the backbone to deal with a 10-20% drop of the stock market accompanied by a negative reaction of the bond market”.

Trenchev sees a choppy 2022 but predicts that Bitcoin will hit $100,000 by the end of June. However, he doesn’t expect tokens like Solana and Avalanche to deliver the same exponential growth as in 2021. scale than Ethereum and other legacy protocols.”

“What really fascinates me in 2022 is the metaverse,” says Trenchev. “That’s going to be one of the main themes next year: the metaverse, building the infrastructure, and then NFTs, which will be part of the economy there.”

The Skeptic
“While I expect crypto speculation to continue, like inflated tech valuations, it faces a much tougher environment in 2022,” said Jeffrey Halley, analyst at Oanda Asia Pacific. “The main reason for this is the start of interest rate normalization by the Federal Reserve, which other major central banks are also expected to follow. This will challenge the rationale for cryptocurrencies as an alternative fiat currency.”

“There is a risk that more regulation will weigh on the crypto space and frankly, with a new coin coming out every week that is supposed to be ‘the next big thing,’ I don’t know if anyone has what ‘you have to,’ says Halley. “I still believe that cryptocurrencies are the greatest collective idiocy of all time in financial markets. The music may go on for a while in 2022, but the Emperor still has no clothes.”

Waiting for an App Store
“The race for cryptocurrency app stores has begun,” said Philip Gradwell, chief economist at news service Chainalysis. “A key lesson of Web 2.0 is that consumers love platforms, and I don’t think that will change for Web 3.0.” There is currently no truly dominant crypto platform in terms of customer relationship and aggregating vendors. “I predict that 2022 will see many companies scrambling to build such a platform, with Coinbase leading the way with DeFi and NFTs integration.” (yy)

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