The interest in cryptocurrencies has been increasing worldwide for the last decade. However, the volatility in cryptocurrencies makes it extremely difficult to predict price movements. You never know which way it would go. It can surpass your expectations one day and can sink to the bottom the other day. So, when you seek the fortunes of cryptocurrencies on the internet, you can expect entirely different views from experts on their performance this year. Some will predict an excellent future for cryptocurrencies in the economic calendar, while others will not be enthusiastic. The market capitalization of cryptocurrencies was hovering around $800 billion at the start of 2021. However, it reached approximately $3 trillion during the year.
Price surge in Bitcoin
Considering the possibility of an increase in inflation rates, the price of Bitcoins (BTCs) has the potential to reach $100,000 by the end of this year. Bitcoin has a reputation because of its prime mover advantage and history and its limited supply of 21 million BTCs. According to some experts, institutional investors also show an inclination to invest in the most decentralized Bitcoin; the chances of it appreciating this year are a strong possibility. Besides, it is one of the cryptocurrencies getting constant demand from investors.
Fintech Experts Opinion
Meanwhile, a panel of 33 industry experts told Finder that Bitcoin is likely to reach $93,717 this year. However, they said BTC has the potential to settle at around $76,360 by the end of 2022. Interestingly, this price is about 60 percent higher than the price of Bitcoin at the start of this year. Bitcoin can make gains this year, but it is unclear whether it could sustain its momentum throughout 2022. The fintech experts also predicted that the price of BTC could reach $192,800 by the end of 2025. They felt it could hit $406,400 by the end of 2030. However, interest rate hikes could adversely affect the prospects of Bitcoin.
Potential of Token Markets
With the token markets making an impact in 2021, there are chances of them being a flat market this year. Many high-profile non-fungible tokens have been struggling now. As a result, they are likely to go down this year, according to experts.
Relation With Stock Markets
Considering the recent volatility in stock markets, how many investors will be placing their bets on stock exchanges this year is uncertain. According to the opinion of experts, the S&P 500 index is likely to gain by only nine percent this year. It is a big letdown compared with the significant gains in the stock markets. Will such predictions affect the confidence of investors in cryptocurrencies as well?
The Fed Move
The US Federal Reserve is likely to raise interest rates in 2022. According to some experts, this move could adversely affect the prospects of crypto as well, while others believe it won’t have much of an impact.
Many crypto investors are keen to know whether the United States will approve the first spot bitcoin exchange-traded fund in the country this year. This move can give more retail interest in cryptocurrencies.
Focus on Other Currencies
Though investors are still enthusiastic about the prospects of Bitcoin, they are looking for alternative options, including other digital currencies such as Ethereum. In addition, investors believe the potential for significant gains is now in small cryptocurrencies. This year, some of the leading coins in focus are Ethereum, Cardano, Solana, and Polkadot.
The decision by top countries can potentially harm the prospects of cryptocurrencies in 2022. China has already banned all crypto-related transactions, while the United States has also planned steps to regulate cryptocurrencies. The regulators are also giving attention to stable coins. They are tokens, and their value has a relation with currencies, including the US dollar. There are also regulatory concerns about Tether, the world’s most significant stable coin.
Understanding The Trade
It is difficult to predict the future of cryptocurrencies precisely, especially considering the evolving nature of technology and trade. With many investors trusting the chances of the new technology, the interest in crypto has been increasing. You need to update yourself with the changing scenarios and strategies before investing your money directly. With high levels of volatility in the market, you need extreme patience and perseverance to make profits from the trade. However, most experts are optimistic about cryptocurrencies this year, and a cautious approach from the investor is required. One also must understand the dangers of investment before entering a relatively new sector. It would help to read more crypto-related information from reliable websites and financial publications. It will help gather essential information regarding the trade before making investments.