Cryptocurrencies are all over the news, but not always in a good way. Bitcoin has been losing popularity lately, and blockchain-based tokens have attracted some controversy. However, an upcoming event could mean that 2022 could be a record year for major cryptos like Bitcoin, the halving of new bitcoins mined. The last time this happened was in 2012 when the number of bitcoins awarded per block was cut in half. Because there will be fewer coins at the disposal of investors and miners, it is expected that the price will go up.
Cryptocurrencies have been around since 2009, but they only started to attract a lot of attention in 2015. This was when some cryptos like Bitcoin and Ethereum became more stable. The combination of speculative investment and innovation attracted a lot of attention from institutional investors and high-profile companies. Billions of dollars started to flow into the market, creating a large bubble that burst in 2017. Some blockchain-based tokens were overvalued at the time and were then cut down by halving events. Crypto is down this year, but it’s not all bad. In fact there are still plenty of opportunities for investors who want to invest their money into crypto right now or update themselves on the latest trends in bitcoin code!
Institutions and governments:
Banks, investors, and other institutions became interested in cryptocurrencies. The banking sector was somewhat wary of them due to their uncertainty, but it seems they have started using them as well. The largest investment bank in the United States has applied for a patent involving blockchain technology used to verify digital assets. Goldman Sachs was an early adopter of Bitcoin, and they have been investing in blockchain-based startups as well.
Governments have been wary of cryptocurrencies, and some have banned them altogether. For example, China has prohibited the use of digital assets by financial firms, but the authorities are now considering creating a cryptocurrency backed by the government. Russia could consider doing something similar. However, they would only do this if it is convenient for them to do so and if it does not contradict their national interests at all.
2022 first quarter price action:
The previous time this happened was in 2012, but it is not known what will happen. The price could go up but down as well. A lot of things can change until 2022, and the exact date of this event is unknown as well. We may end up seeing a lot of changes in the blockchain sector between now and then, like the consolidation of major players or the entry of institutional investors into cryptocurrency. It is unlikely that the balance of power will change in 2018. The biggest exchanges are still located in Asia, and the US dollar is still extremely important for cryptocurrencies. Over half of all bitcoin transactions were off-chain payments and exchanges at the end of 2017. This could change in the future because more countries are embracing digital assets, and most of them have a more friendly stance concerning blockchain technology. Read more about Everything you need to know about Bitcoin stocks.
Outlook for Bitcoin for 2022:
Bitcoin is the dominant cryptocurrency, and it is unlikely to lose this position anytime soon. However, it will probably lose some value compared to fiat currencies. It has already lost a lot of its value since December 2017, and this trend could continue. This price drop, or stagnation for a few years, could come about because there will be fewer bitcoins in circulation. A lot of investors and miners are likely to sell their coins when the halving happens. The supply and demand for Bitcoin could improve due to this, but it is unlikely to go up significantly. This means that the price could be higher, but it could also go down or remain stable.
The chances of digital assets being used by governments are increasing as well. This is likely to have a positive effect on the prices, and this trend could extend into 2022 if not beyond. The main factor influencing bitcoin is what happens with governments concerning cryptocurrencies in general and blockchain technology in particular. The price will most likely remain low compared to its all-time high for a few more years and then start to go up slowly again.
The long-term forecast through 2025:
As mentioned earlier, this halving could have a positive effect on Bitcoin. However, it is unlikely that the price will go up significantly because a lot of investors would expect to make more money by buying more coins than they have to. It is likely that the price will only go back to where it was in December 2017. The next halving will not happen until 2020 at the earliest and 2021 at the latest. This means that if there are no outside factors that could influence the price in the near future, it will likely go down. The most likely scenario would be a slight increase because the demand for Bitcoin is increasing.
Conclusion:
There is still a lot of uncertainty surrounding digital assets, but the outlook is somewhat positive. The price could go down or up, and it could stay stable as well. It will likely be more stable than its all-time high because governments are starting to embrace blockchain technology, and some of them are considering creating cryptocurrencies of their own. More countries are also looking at the advantages of Bitcoin and other major cryptos for their national economies.
