What Will Happen to BTC in 2022？

21 February 11:48

【TR; DR】

The first and perhaps amongst the most significant of all cryptocurrencies, Bitcoin carried the torch for decentralised finance and unleashed newfound technological capabilities to cultivate - thus bearing the modern cryptocurrency market. Developed by an anonymous entity under the pseudonym, Satoshi Nakamoto, Bitcoin was unveiled to the wider world in 2009 and has since grown to become one of the most momentous contributions to the modern world of digital finance.

As Bitcoin has soared over 63,540.79% （as of today） since its inception, many investors eagerly anticipate what the future will hold for Bitcoin - particularly as the cryptocurrency space has become shrouded with other cryptocurrencies. Both bulls and bears are pitted head to head in constant trivial debates about the future trajectory for Bitcoin valuation, with some believing Bitcoin is poised to leap towards $100,000, or even further beyond, whilst other analysts expect a bearish downfall, plunging BTC into its lower ranges.

However, what remains the most pivotal is understanding how Bitcoin will perform throughout 2022, whether this be through technical analysis, subjective opinions, or even upcoming events or adoption that could propel Bitcoin in either direction valuation wise.

What Is Bitcoin Like Now?

Bitcoin ended 2021 on a somewhat sombre note after tumbling from unprecedented highs of $67,758.22 seen in mid-to-late December, towards the lower boundaries of $60,000, before further crashing into the lower $40,000 range in early January. Investors and analysts globally gripped onto their portfolios as Bitcoin continued to perform the onerous task of slumping further towards $30,000 in what appears to be one of the most significant bearish periods in recent years.

Witnessing lows not seen since the 2020 ‘Covid Crash’, Bitcoin has continued to endure a slumber tainted with red candlesticks and further impending regulatory proposals which has had investors teetering on the edge of their seats as the current ‘Alt-Season’ is in full throttle. Yet, as Bitcoin has trundled downwards, as has a majority of the market, following suit of the key player within the cryptocurrency market.

January saw one of the most devastating lows for Bitcoin in recent price history, where it sank to $33,503.47 in the early morning of the 24th, halving the value of its recent former ATH and spiralling Bitcoin from its seemingly promising signs of recovery witnessed on the 13th of January. Following this detrimental blow, Bitcoin began to clamber upwards, sprawling itself upwards ephemerally before continuing to navigate the rocky valleys and troughs of the $30,000 region.

Yet hope returned as February began, starting the month as a sheepish $38,341.39, Bitcoin saw a sharp uptick, launching itself towards $41,000 and continuing along this trajectory as the opening week of February draws to a close. Yet as Bitcoin has continued to engage in vast, unforeseeable periods of volatility, its future appears somewhat indistinguishable and ambiguous, particularly as other assets follow a similar suit.

Bullish Projection

Whilst Bitcoin may currently appear to be bouncing between some of the most significant lows of its history, more bullish crypto analysts and critics have remarked upon this period as being solely temporary as a bull run brews beneath the service. New-York-based accountant and crypto specilaots, Kate Waltman, revealed to Time magazine that several of the ‘most knowledgeable educators’ are anticipating Bitcoin to soar towards $100,000 in Q1 of 2022, or perhaps even sooner.

Whilst we may already be submerged in the middle of Q1, this does not dwindle Bitcoin’s opportunity to continue amassing buying power and furthering it’s valuation. Founder of Invest Diva, Kiana Danial reported that the current ‘turbulence’ is to be expected, with investors likely having to endure this for a prolonged time period prior to seeing ‘big gains’ that could reshape and revitalise the current cryptocurrency market. ‘What I expect from Bitcoin is volatility short-term and growth long-term’, stated Danial, thus amassing hope that the current declining state of Bitcoin is simply a temporary occurrence that is yet to be reformed as the market changes course.

Similarly to Danial, Kjetil Hove Pettersen, CEO of Norwegian Bitcoin mining operations specialist Kryptovault, hypothesised that Bitcoin will ‘continue to be volatile’ yet the ‘long-term trend will point upwards and it is going to more than double in terms of total market cap per annum on average’. Yet, somewhat dishearteningly, Pettersen also acknowledged the complexity and impossibility of predicting the future valuation of any cryptocurrency or general asset with a high degree of accuracy.

Taking a more long-term bullish stance, lending itself beyond the confines of 2022, Cathie Wood and her firm, ARK Invest, have risen in prominent throughout the pandemic by pushing the possibility of Bitcoin soaring to $1.36 million per coin by 2030, due to its significant array of use cases and viable utilisation across various industries. Yet, it is critical to take note that ARK Invest has been known to earn advisory fees based on their volume of assets under management, thereby increasing interest in Bitcoin （something the firm retains under management） may be a tactic to earn more capital. Yet her projections remain crucial in assessing the widespread bullishness towards Bitcoin.

However, from a less subjective perspective, a bipartisan group of the American Congress has introduced a radical crypto bill in an attempt to ‘unleash innovation‘, thus creating a level playing field in which various digital assets can unleash their creativity and development of micropayments, therefore offering more use cases to their users. This therefore emphasises that the growing regulatory impositions on cryptocurrency may prove to be less of a restriction, particularly in the USA, than previously suggested.

Therefore, several analysts are under the impression that Bitcoin may be on track to make a sharp recovery in light of its current bearish trough.

Bearish Projection

Despite the widespread bearishness that surrounds the current cryptocurrency landscape, in particular Bitcoin, several investors have also expressed their dismay about what may lie ahead for Bitcoin in the near future.

Following its six month low of $33,000, Bitcoin has done little to redeem itself, simply bouncing between the boundaries of $33,000-$41,000, which has ultimately alarmed many investors. After essentially halving its value since Bitcoin reached into price discovery, it has since been set back by ’surging inflation, lagging recovery in the job market, and the Fed’s ongoing signals that it would begin sliding down pandemic measures to support the economy‘ according to NextAdvisor, thus suggesting that Bitcoin may continue to lag for the time particularly in light of the current international economic state.

Analysts working for CoinDesk reported that in January the Bitcoin Fear & Greed Index was currently at its lowest level since July, emphasising the growing level of market fear and acting as a contrarian indicator amongst crypto traders. Following this, Arcane Research reported that ’this unusually long period of negative market sentiment‘ may spell uncertainty for investors, as fear typically grapples the market for as long as a month before moving horizontally and towards a decisive upwards or downwards momentum.

Ultimately, only the future will determine whether Bitcoin’s valuation will continue bounding within this bearish trajectory.

Conclusion

Whilst the future of Bitcoin is relatively unknown, due to the immense volatility of the cryptocurrency landscape, it is undeniable that Bitcoin will continue to emerge further into public consciousness and that it will be subject to further adoption, as well as potential impediments such as regulation. Only time will tell where the future of Bitcoin is truly heading.

Author：Matthew W-D, Gate.io Researcher
*This article represents only the views of the researcher and does not constitute any investment suggestions.
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