When Bitcoin plunged from its all-time high of $68,950 in November 2021 to under $33,000 in January 2022, analysts raised concerns that a “Crypto Winter” was at hand, that cryptocurrencies in general and the world’s most popular crypto in particular were headed toward a deep freeze.
Analysts quickly revised that prediction, however, and by late January foresaw Bitcoin’s value exceeding $76,000 by the end of 2022, before climbing to $192,800 by the end of 2025 and $406,400 by the end of 2030. Just a few weeks later, as Bitcoin’s value climbed above $40,000, the predictions grew rosier still. There was an expectation in some corners that it would reach $200,000 in the second half of 2022.
Sean Farrell, head of digital asset strategy for the research firm FSInsights, made that observation in a note to investors, basing his prediction on “legacy market capital entering the fold.”
Wells Fargo expressed similar optimism in a report issued in early February, comparing crypto adoption to that of technology in the mid- to late ‘90s: “At that time, the internet hit a hyper-adoption phase and never looked back. Cryptocurrencies appear to be at a similar stage today.”
And indeed, the report added, some 221 million people were using cryptos around the globe in June 2021, over double the number of four months earlier:
If this trend continues, cryptocurrencies could soon exit the early adoption phase and enter an inflection point of hyper-adoption, similar to other technologies. There is a point where adoption rates begin to rise and do not look back […] Precise numbers aside, there is no doubt that global cryptocurrency adoption is rising, and could soon hit a hyper-inflection point.
In short, things don’t sound so wintry anymore. The comparison to the last Crypto Winter, which began late in 2017, continued into early 2018 and saw Bitcoin lose 84 percent of its value, would not appear to be valid.
So Prediction No. 1 for 2022 would be this: Things are going to be fine in the Bitcoin space.
The website Analytics Inside likewise believes that more people will be adopting Bitcoin as a digital asset, and at least paid lip service to the idea that other countries will follow El Salvador’s lead and make Bitcoin legal tender.
Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisory, was even more bullish about the latter, suggesting that three other countries will adopt Bitcoin this year, and mentioning Panama, Paraguay, Guatemala and Honduras as possibilities.
Per Analytics Inside, here are three other predictions for this year:
- Crypto will face increased regulation: And indeed, there were hints in 2021 that that will be the case, as mentioned in the Global Blockchain Business Council’s inaugural International Journal of Blockchain Law. In it, U.S. Securities and Exchange Commission commissioner Caroline Crenshaw suggested that several governmental bodies, including the SEC, should take the lead on this front.
- Banks will offer Bitcoin-related services: Again, this is already on the front burner. Even though banks and cryptos have a fraught relationship, the banks understand the demand for Bitcoin, as exhibited by U.S. Bank’s decision in October 2021 to offer custody services for cryptos.
- There will be more cyberattacks: This has become a sad fact, as shown by the increasing number of cyberattacks and scams inflicted upon the decentralized finance sector in 2021.
On balance, the year ahead is a promising one for Bitcoin. January’s downturn seemed to be nothing more than a momentary setback. Far from being another Crypto Winter, there appears to be nothing but green grass and high tides ahead.