Bitcoin will collapse in 2022, according to analysts, the future of digital currencies..!

Cryptocurrencies – Pal Plus The “CNBC” website issued a report on the expectations of financial experts that the value of Bitcoin will decline and collapse in 2022, eliminating almost all of its gains made in the past 18 months, as analysts expected a repeat of the collapse of Bitcoin as happened in 2018, when It collapsed to nearly $3,000.

The cryptocurrency soared to a record high of around $69,000 last November, but is currently at just under $50,000, 30% below its peak.

Carol Alexander, a professor of finance at the University of Sussex, said she expects bitcoin to drop to $10,000 in 2022, wiping out nearly all of its gains in the past 18 months.

“If I were an investor now, I would consider exiting bitcoin soon because its price is likely to collapse next year,” Carroll added.

Its bearish claim is based on the idea that Bitcoin has "no intrinsic value", but rather is "fake" and not an investment.

Carol Alexander warned that history must repeat itself; In 2018, Bitcoin dropped to nearly $3,000 after peaking at around $20,000 a few months ago, proponents of the digital currency often saying things are different this time, with more institutional investors jumping into the market.

“There is no doubt that the bitcoin price chart seems to track a lot of bubbles and failures, and it has a different narrative this time around, just like the others,” said Todd Lowenstein, chief equity strategist at Union Bank's private banking arm.

A common investment case for bitcoin is that it acts as a hedge against rising inflation caused by government stimulus; In this regard, Lowenstein said there is a danger from the more aggressive Federal Reserve of blowing up the sails of bitcoin.

He said, “The wave of liquidity is receding, which will disproportionately harm overvalued asset classes and speculative areas in the market, including digital currencies.”

However, not everyone is convinced that the digital currency will expire in 2022, and the digital market analyst at the Japanese digital assets exchange “Bitbank”, “Yuya Hasiyawa”, said: “The Fed has identified the biggest risk factor, which is (quantitative easing), and perhaps the most important factor A risk, from the Fed, and a fixed rate is likely.”

First Bitcoin Fund (ETF)

The biggest development for a cryptocurrency investor in 2022 is the approval of the first Bitcoin investment center in the United States.

Although the Securities and Exchange Commission has given the green light to launch Bitcoin for equity investments this year, the product tracks Bitcoin futures rather than direct investor exposure to the cryptocurrency itself.

Futures are financial derivatives that force an investor to buy or sell an asset at a future date at an agreed-upon price, by tracking futures prices rather than bitcoin itself. digital currencies.

“The bitcoin futures fund launched this year is not very retail-friendly due to the high costs involved in contract trading, at 5-10 percent,” said Vijay Ayyar, vice president of corporate development and global expansion at cryptocurrency exchange. “.

Decentralized Finance (DeFi)

With the development of the crypto industry, bitcoin's market share has declined, with other digital currencies, such as Ethereum, playing a much larger role, and this is something analysts hope will continue in the coming year as investors look for more and more other currencies and crypto products, hoping to make a big profit. .

Carol Alexander described Ethereum, Polkadot, Solana and Cardano as worth pursuing in 2022.

She added, “I expect the market capitalization of Bitcoin to reach half the maximum cap for smart contract currencies,” such as Ethereum and Solana, “or even lower.”

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“Emerging developments in crypto, such as decentralized finance and decentralized autonomous organizations, are likely to be the fastest growing areas of crypto,” said Brian Gross, network agent for crypto platform ICCHI. traditional without intermediaries, while DAOs can be considered as a new type of online community.

Total funds deposited in decentralized financial services exceeded $200 billion for the first time this year, and experts expect demand to grow further in 2022.

Decentralized finance is part of a broader trend in technology known as 'Web3'.

A busy year on the organizational front

Regulators flexed their muscle on cryptocurrencies last year as China banned all crypto-related activities and US authorities cracked down on certain aspects of the market, and analysts widely expect regulation to be a major problem in 2022.

“The year 2022 will be a great year on the organizational front,” said Figari Ayar.

He added that he sees some clarification on the legal "gray area" of cryptocurrencies other than Bitcoin and Ethereum, which the Securities and Exchange Commission has said are not securities.

Experts say that this year, investors are likely to focus on "stable coins", that is, stablecoins that are not subject to speculation.