There were a lot of exciting events in the cryptocurrency community in 2021. DeFi projects were actively developing, the popularity of NFT tokens was growing, and in several countries, cryptocurrencies were officially recognised as a means of payment. The current year 2022 promises to be no less eventful, as interest in blockchain technology and cryptocurrencies keeps growing. Moreover, inflation pushes investors to look for new safe havens to save and increase their savings, so over time, more long-term money will appear on the cryptocurrency market, which will make it even more stable.
Opinion of Reinis Tumovs, a banking expert, Chairman of the Advisory Board of Wellcome Key Worldwide
Dr. Reinis Tumovs BAcc, MFin, PhD., Chairman of the Advisory Board of Wellcome Key Worldwide
Events in Kazakhstan
The new year began with distressing news for the entire industry. Protests in Kazakhstan provoked internet shutdowns throughout the country. It's important to understand that Kazakhstan is of great importance for the whole cryptocurrency community since this country hosts 18 per cent of all the bitcoin blockchain computing power (the second indicator in the world). The drop of so many miners, even short term, could not go unnoticed. The bitcoin rate reacted respectively to the events in Kazakhstan with a decline. But what is even worse, there appeared a real risk to get the so-called "thrombus" of payments. Fortunately for the entire industry, the situation was quickly normalised.
Bitcoin growth and volatility
The crisis phenomena in Kazakhstan have only heated the interest of investors to the coin, for whom its short-term decline was a good moment to open new positions. As for the long-term perspective, interest in cryptocurrencies will continue to grow. Accelerated inflation will push investors to look for new ways to protect their assets, and many of them will pay more and more attention to the cryptocurrency market.
The growth in demand will logically affect the rate of bitcoin. Goldman Sachs believes that bitcoin is quite capable of "taking" a height of 100 thousand dollars per coin in the coming year. And I think this prediction is quite reliable. Moreover, Bitcoin can set a new historical record in the middle of the year. However, this jump is likely to be followed by a decline due to financial regulators' tightening of monetary policy in the second half of the year. A decrease in profitability will lead to the exit of speculative investors from the market, but institutional investors will most likely remain on it, which will allow bitcoin to gain a foothold in the second half of the year at the level of 40-60 thousand dollars per coin.
Market capitalisation
On the wave of investors' increased interest in the cryptocurrency market and due to the active development of DeFi and NFT projects, by the middle of 2022, its capitalisation, according to John Woo, head of Ava Labs, is likely to exceed $4 trillion. However, if the world's leading central banks change their policy, the bitcoin rate will begin to decline. So by the end of the year, the cryptocurrency market's capitalisation will most likely be less than $3.5 trillion.
Currencies race
Another important event of the current year will be the update of the Ethereum blockchain, expanding the network and improving the mechanism for payments processing and transfers.
According to the head of the investment department of ICB Fund Aaron Khomsky, together with the growth of general interest in cryptocurrencies, this circumstance will help Ethereum grow in price from today's 4 to 6 and even up to 8 thousand dollars per coin. This is also quite realistic since the exchange rate of this cryptocurrency will give additional support to numerous NFT and DeFi projects, for which the Ethereum blockchain is the most convenient platform.
Attitude to the market
At the same time, the attitude of the monetary authorities towards cryptocurrencies continues to be ambiguous. For example, the Central Bank of Russia claimed that cryptocurrencies have no future on the Russian market. At the same time, a few days earlier, the start of using the digital ruble as a means of payment was announced. This pilot project will last exactly one year, and, based on its results, a decision will be made on the reliability of further work in this direction.
However, few people doubt that the experiment results will be positive even now.
Cryptocurrency topic is actively covered in the media; blockchain as a technology is increasingly being used in various sectors of the economy. As a result, even hardened sceptics, who previously completely ignored this market, are increasingly interested in digital assets.
Therefore, 2022 has every chance of becoming extremely successful for the entire cryptocurrency community.
No comments:
Post a Comment