After a record year for bitcoin, 2022 promises to be uncertain

(London) Bitcoin saw its price boosted in 2021 by traditional finance’s appetite for this new type of investment, but crypto specialists are struggling to predict how this volatile sector will perform in 2022.

French Media Agency

After having chained the records at the end of 2020 and at the beginning of the year, bitcoin seems to have lost some of its shine: between December and April, the cryptocurrency chained the highest all-time highs, going from less than 20,000 dollars to more than 60,000. Dollars.

A driven performance, fueled by the interest of big names in new technologies and finance, which until then had stayed away from this technology, which has only existed since 2008.

But since then, and despite a new record in October, bitcoin has continued its rallies with equally spectacular dips, evolving at the end of December to less than $ 50,000.

“The irregular and directionless behavior of prices, which could translate into a further decline in the short term, makes the market very uncertain,” admits Loukas Lagoudis of crypto fund ARK36.

But “we expect the adoption of digital assets by institutional investors and their integration into the traditional financial system to further boost the crypto market next year,” he believes.

The regulator is watching

In fact, this is what has driven the price of bitcoin since the end of 2020: announcements related to cryptocurrency have multiplied over the months, from the big names in traditional finance to those of new technology.

While El Salvador’s adoption of bitcoin as an official currency has impressed, investors have focused on Wall Street’s appetite for cryptocurrencies.

The bitcoin high in April coincided with the IPO of cryptocurrency trading and buying platform Coinbase, and the October record with the regulator’s approval of indexed products linked to bitcoin.

Either way, crypto enthusiasts endorse what they see as signs that the market is calming down.

The risk of regulatory action weighs on cryptocurrencies, created in the wake of the financial crisis so as not to depend on central banks, and whose extremely high electricity consumption is often criticized.

In China, the state banned cryptocurrency transactions at the end of September, and regulators in Europe and the United States are increasingly investigating this decentralized network, which is very difficult to regulate.

“There is never certainty when it comes to crypto, much less regulation. But one thing is for sure, the voices calling for greater regulation of cryptocurrencies will get louder and louder, “warns Huong Hauduc, from the exchange platform Bequant.

Less marked domain

So far, critics of bitcoin aren’t stopping some of the richest men in the world from taking an interest in it.

Tesla boss Elon Musk has regularly moved the market, notably by announcing that he has invested some of his group’s cash in bitcoin.

More radical, Jack Dorsey left the Twitter administration to focus on his digital payments company, Square, which he renamed Block and where he plans to develop his activities related to cryptocurrencies.

But bitcoin also runs the risk of competing with other cryptocurrencies.

According to the specialized site CoinGecko, which lists more than 12,000 cryptocurrencies, this market represents 2.360 billion dollars, including more than 900 billion for bitcoin alone.

Its share has declined throughout the year, and as No. 2 Ethereum prepares to try to evolve its model, some wonder if the decentralization that makes the evolution of bitcoin practically impossible will not cause its loss.

“Bitcoin’s reluctance to change its model is, in our opinion, one of the characteristics that makes it stable and consistent, which is necessary for a real global currency,” replied Frank Downing, an analyst at ARK.

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