Top 4 Prominent Crypto Market Events in 2022

Recently, CNBC brought together the opinions of leading experts to make 4 predictions about the cryptocurrency market in 2022.

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In 2021, Bitcoin will rise nearly 70% and bring a total market value of over $ 2 trillion, the first major crypto company to go public with the launch of Coinbase in April, Goldman Sachs will join the first Bitcoin Exchange Traded Fund (ETF) . What will the crypto market look like in 2022?

Bitcoin will crash

Bitcoin hit a record high near $ 69,000 in November, but the price has steadily declined since then, operating below the $ 50,000 mark, nearly 30% less than ATH (all-time high).

BTC 1 Day Price Chart | Source: Tradingview

University of Sussex finance professor Carol Alexander predicts that Bitcoin will dip as low as $ 10,000 by 2022, wiping out almost all of the gains made in the past year and a half.

Their bearish prediction is based on the notion that Bitcoin has “no fundamental value” and is more of a “toy” than an investment.

Alexander warns that history will repeat itself. In 2018, Bitcoin fell to nearly $ 3,000 after climbing to a high of around $ 20,000 a few months ago.

Todd Lowenstein, Director of Equity Strategy for Union Bank’s Private Banking division, said:

“Undoubtedly, the Bitcoin price chart seems to be following the same path as many of the bubbles and collapses of historical assets.”

However, not everyone believes the crypto party will end in 2022. There are some investors who still believe that Bitcoin could well hit $ 100,000 / coin in the next year.

The first spot Bitcoin ETF can hit the market

In 2022, the big move investors are waiting for is the first spot Bitcoin ETF in the US to be accepted.

Although the US Securities and Exchange Commission (SEC) gave ProShares the green light to launch a Bitcoin strategy ETF earlier this year, the product relies on Bitcoin futures instead of putting investors in direct contact with the cryptocurrency itself.

A futures contract is a financial derivative instrument that obliges an investor to buy or sell an asset at an agreed price at a later date. Experts say the ProShares ETF might be too risky for inexperienced traders investing in cryptocurrencies by tracking futures prices instead of tracking Bitcoin itself.

Vijay Ayyar, Vice President of Corporate Development and Global Expansion at Luno Exchange said:

“The increasing pressure to provide evidence suggests that a spot Bitcoin ETF will be approved in 2022, largely because the market is now large and mature enough to support it.”

Grayscale Investments has filed an application to convert its Bitcoin Trust (the world’s largest Bitcoin fund) into a spot ETF. At the same time, many more Bitcoin ETF applications are waiting to be licensed.

Capital rotation in DeFi (decentralized financing)

As the cryptocurrency industry grows, Bitcoin’s market share is falling and other digital currencies like ETH play a much bigger role. Analysts expect this to continue into the next year as investors increasingly look to smaller cryptocurrencies in hopes of big gains.

Professor Alexander from the University of Sussex highlighted ETH, SOL, DOT and ADA as coins to watch in 2022.

Bryan Gross, system manager of the ICHI crypto platform, said:

“New crypto developments like decentralized finance and decentralized autonomous organization (DAO) are likely to be the fastest growing areas of the crypto space.”

DeFi aims to replicate traditional financial products with no middlemen, while DAO is seen as a new breed of internet community.

Total deposits in DeFi services exceeded $ 200 billion this year for the first time this year, and experts predict that demand will continue to rise in 2022.

DeFi is part of a broader trend in Web3 technology. The Web3 movement is creating a new, decentralized version of the internet that includes blockchain and cryptocurrency technologies like NFT.

A great year on the legal front

Regulators have been tougher on cryptocurrencies this year, with China completely banning all related activities and US authorities putting pressure on certain aspects of the market. Many analysts predict that regulation will be a key issue for the crypto market in 2022.

“2022 will be an important year on the regulatory front,” said Luno analyst Ayyar. The interest of many governments, especially the United States, in bringing regulation into the crypto space has never been as strong as it is now. “

Another important area that regulators are likely to focus on over the next year is stablecoins, experts say. These are tokens whose value is linked to existing assets such as US dollars.

Meanwhile, regulators are also starting to monitor the DeFi room. Earlier this month, the central bank’s umbrella group, the Bank for International Settlements, called for DeFi to be regulated.