2021 brought 70% year-to-date value gains for Bitcoin which took the global crypto economy passing the US$ 2 Trillion mark. But the prospects for Bitcoin were severely damaged at the hands of regulatory scrutiny and massive price corrections. It is expected by many analysts that a massive reduction in Bitcoin value is waiting around the corner and will reveal itself in the initial months of 2022.
Although Bitcoin is failing to meet the aspirations of people before the year-end, yet year-to-date gains for Bitcoin are still over 70%. It was the gains of Bitcoin which single-handedly took the global crypto economy in surpassing the US$ 2 Trillion mark.
The year 2021 also saw the world’s biggest crypto trading platform i.e. Coinbase transforming into a public listed company. On the other hand, major global institutions such as Goldman Sachs too became the digital currency industry’s participants. In addition, the Securities & Exchange Commission of the US authorized the launching of the first Bitcoin ETF fund in 2021. These were all the prospects coupled together which helped Bitcoin in making the year 2021 “unforgettable”.
Yet, currently, Bitcoin prospects have been severely impacted because of over-hyped discussions of ‘regulatory scrutiny’ and ‘massive price fluctuations. The general feeling amongst Bitcoin analysts is that a further downturn is awaiting to occur in the initial 3 months of 2022. After the initial three months of 2022, however, experts believe that overall 2022 would also be a roller-coaster ride for the global crypto economy.
It is worthwhile to examine the chances of a Bitcoin market crash, which the analysts are speaking of.
When in November 2021, Bitcoin value reached US$ 69,000 plus, it was the All-Time High (ATH) for Bitcoin. Today, Bitcoin’s value is reduced and it has reduced to an extent of more than US$10,000 i.e. US$50,000 as of 22nd December. Comparing Bitcoin’s present value with the ATH value, a 30% reduction is evident on the face of it. Minds in the Wall Street suggest that Bitcoin bears have reduced by at least 20% lately.
A Professor of Finance at the University of Sussex, Carol Alexander, predicted that 2022 will wipe out all of BTC’s 2021 gains. She said that she is looking at the price of US$ 10,000 for Bitcoin in 2022. She suggested that she wouldn’t advise anyone to invest in Bitcoin today. Instead, she would insist Bitcoin investors get out of Bitcoin immediately because the crash is unavoidable in the coming future.
She argued that Bitcoin is in the habit of repeating its past history. After hitting US$ 20,000 in 2018, the volatility of Bitcoin lowered the price below US$ 3,000. Those who argue that the situation has changed now are misguided as nothing has changed. The charts of Bitcoin are very much in line with the patterns evident in 2018, argued Carol Alexander.
The near future is not far and only time will tell whether the analysts were right or wrong.