What Bitcoin (BTC) price prediction can be given for 2022?
2021 has been a perfect year for the cryptocurrency market in general and Bitcoin is one of its cornerstones. The adoption of cryptocurrencies has increased, and a growing number of people explores this area of investment. In 2021 Bitcoin added more than 70% to its value, attracting both seasoned investors and newbies, who make their first steps in the world of cryptocurrency. Knowing, what Bitcoin price predictions for 2022 exist, will help you to define the right directions for your investments.
This area attracts rising attention from investors of various caliber, from small-scale private investors to some businessman who has already established their name in other areas and is now attempting to enter the crypto-market. For example, the former Twitter CEO Jack Dorsey announced his plans to work on Bitcoin-centered products. The importance of Bitcoin is recognized by technology giants. For example, Bill Gates, a famous investor, and philanthropist called it “the masterwork of modern technology”. In one of his interviews, he said that, although he keeps a neutral opinion about Bitcoin, it is an innovation the world couldn’t live without.
What defined Bitcoin price in 2021?
The сrypto market is usually considered an area of high risk. The value of cryptocurrency isn’t tied to any real-world assets and can change rapidly, reacting to world news, expert statements, or new legislation in certain countries. To invest successfully, you need to be able to evaluate such factors and predict, how the price will change in the future. These predictions cannot be absolutely precise, but even guessing the trend right can tremendously increase your income.
The price of Bitcoin was changing during the course of 2021. In the first half of the year, its price reached its all-time high, supported by the widening adoption of cryptocurrencies in first-world countries. But since May its value was slowly decreasing, which is mostly related to the fact that China banned most cryptocurrency-related transactions. Several other events are also worth mentioning because they influenced Bitcoin value in 2021:
- China banned crypto-mining activities on its territory, causing mining hardware sellers to move their services out of China.
- Elon Musk criticized Bitcoin for high energy usage.
- El Salvador made BTC a legal payment method in the country.
These events caused significant ups and downs in the market, but in total positive trend prevails. Despite several experts predicting a “crypto crash”, or an abrupt fall of Bitcoin, Ethereum, and other crypto coins prices, this course of events is highly unlikely. On the contrary, in November Bitcoin reached its new all-time high. Since then, its price fell, but still remains between 45-50 thousand dollars per coin. There are also other trends, that support the stability of the market.
What is Bitcoin ETF and why will it be important in 2022?
One of the main events for Bitcoin in 2022 will be possibly the approval of the first Bitcoin ETF, or exchange trading fund. This means these investors will be able to conclude futures contracts for Bitcoin, in addition, to directly buying and selling cryptocurrency. Essentially, futures are contracts, that create an obligation for an investor to buy or sell a defined asset on a certain date for a fixed price. This tool is aimed primarily at experienced investors because it can cause a lot of risks for novice traders.
The launch of another exchange trading fund, known as Bitcoin Strategy ETF, was already approved by US financial authorities. But some experts consider these funds not very accessible for private investors because of the high cost of contrast.
Now their hopes and expectations point towards the coming approval of Bitcoin Spot ETF. This is a project created by Grayscale Investments, which plans to convert their largest bitcoin fund into a spot ETF. There much more ETF-related bitcoin applications that were launched just recently or await approval soon. Among many experts, the opinion prevails, that in 2022 the EFT market for Bitcoin will thrive because the market is mature enough to reach this stage of its development.
What will be the future of Bitcoin ETFs?
Bitcoin ETFs are actively discussed since the autumn of 2021. Exchange trading funds is a rapidly developing area of the investment world, and it was a matter of time before it eventually will connect with cryptocurrency. The main feature of Bitcoin ETF is the fact that it makes crypto-trading more accessible for investors, who can acquire some cryptocurrency assets without dealing with complex procedures of direct investment into it. This also allows them to use traditional exchanges and markets – they don’t need to deal with additional costs related to exchanges.
Another important feature of Bitcoin EFT is the possibility of short selling. Thus, an investor will be able to trade their ETF shares if they believe, that their price will change in the future. Which is even more important, an exchange investment fund is already widely adopted among investors, so it attracts even those, who avoided dealing with innovative and risky assets.
What predictions do experts give for Bitcoin?
At the end of December technical indicators for Bitcoin were negative, but this doesn’t mean the trend will remain negative in the future. Long-term indicators look much more promising, and it can be expected, that they will perform better in the coming weeks and months.
If you try to find out, what Bitcoin price predictions of 2022 promise, you probably will have several different versions with varying degrees of optimism. No matter what of them you will choose to follow, you should be aware, that cryptocurrency is a risky investment. To lower the risks, it is necessary to stay on top of news and trends, and always consult several sources to form your own opinion and understand, how the market will develop in the future.