Bitcoin was trading at around $46,100 on Tuesday in Hong Kong.
New Delhi: After the Federal Reserve turned hawkish toward curtailing cryptocurrencies at the end of the year while mostly saving other risk assets, central bank policy is playing a key role in the debate. on the outlook for the token in 2022.
To what extent will Jerome Powell’s Fed tighten policy to contain inflation? Some analysts say the answer to that question will help determine whether Bitcoin will continue to rise 60% in 2021.
Another school of thought holds that when companies from Meta Platforms Inc. (formerly Facebook) to Apple Inc. push deeper into the metaverse and consumers continue to flock to non-fungible tokens, which will push cryptocurrencies higher regardless of the macroeconomic forces at play. Just witness the sale of a piece of art by NFT last year for $69.3 million at Christie’s, or the loosely organized group of crypto investors that battled billionaire Ken Griffin in an auction for a copy of the United States Constitution.
Bitcoin was trading at around $46,100 on Tuesday at 9:52 a.m. in Hong Kong, up about 0.2% on the day. Here, four market watchers discuss their prospects for the token and the broader crypto universe in 2022:
Bullish bitcoin techniques
“We are bullish on Bitcoin long-term, based on our long-term trend-following measures,” said Katie Stockton, founder and managing partner of Fairlead Strategies LLC.
“We assume that the long-term uptrend is self-sustaining and a more decisive break to new highs will allow for an impressive measured move forecast of around $90,000. For now, a corrective phase remains in place, although there are potential signs of near-term bearish exhaustion. ”
Fed and Metaverse
“The #1 influencing factor for Bitcoin and crypto in 2022 is central bank policy,” Antoni Trenchev, managing partner at crypto lending firm Nexo, said in an email. “Cheap money is here to stay, which means a lot for crypto,” as “The Fed doesn’t have the stomach or the backbone to withstand a 10%-20% crash in the stock market, along with the adverse reaction in the bond market. ”
Trenchev sees an uncertain 2022, but forecasts Bitcoin to hit $100,000 by the end of June. He also doesn’t expect tokens like Solana and Avalanche to deliver the same exponential returns as they did. in 2021, but instead “these startups – brimming with arrogance, attitudes, and hilarious stories – will face the same scaling challenges as Ethereum and other protocols.” older face. ”
“What I’m really excited about in 2022 is the metaverse,” he wrote. “The ‘birth’ and use of the term metaverse is a beautiful mess, and it has a lot of potential. It will be one of the overarching themes of next year: the metaverse, building the infrastructure and then the NFTs that will make up part of the economy there. “
Skeptics
Jeffrey Halley, senior market analyst at Oanda Asia Pacific, said: “While I expect speculative enthusiasm to continue in the crypto space, it is the same for public valuations. technology, face a much more challenging environment in 2022.” “The main reason is that the Federal Reserve has begun to normalize interest rates but other major central banks are likely to follow suit. That would challenge the obvious trend that cryptocurrency is an alternative to fiat money. “
“Hang on the crypto space is the threat of more regulation and honestly, with a new coin coming out every week, this is the ‘next big thing’ and is driven by speculation not not blockchain, I am struggling to see what any of them will do,” said Halley. “I continue to believe that crypto is the dumbest case of financial market group thinking in history. Music may continue to play through 2022, but the emperor is still unclothed. “
Waiting for an App Store
“The race to be the app store for crypto is on,” said Philip Gradwell, chief economist at Chainalysis. “A key lesson of Web 2.0 is that consumers love platforms, and I don’t think that will change for Web 3.0. There is currently no cryptocurrency platform that owns customer relationships and aggregates vendors. I predict that by 2022, many companies will be racing to build this platform, with Coinbase leading as it integrates DeFi and NFT.”
