How much is US Federal Reserve Chairman Jerome Powell willing to implement “tight” monetary policy? What will Facebook do this year? For many analysts, the answers to these questions could determine whether Bitcoin will continue down the road in 2022, continuing the gains it made last year, or whether it will, in turn, be tossed by a bear over the cliff.
In the last quarter of last year, Powell recognized the need to anticipate a policy of “decreasing” through the year, while Andrew Bosworth, Facebook’s new CIO, said 2022 would be critical to “increase compliance with blockchain technology, and explore decentralized autonomous organizations (DAO)”. And bet on NFT (Non-Foldable Tokens).”
Bitcoin on the ‘bullish’ trend
Katie Stockton, founder and director of Fairlead Strategies LLC, an expert called by Bloomberg about the future of “cryptocoin.”
The expert believes that big companies’ bets on the metaverse, such as Facebook, are what drives the bitcoin price the most: “The metaverse is a cosmic chaos, the phenomenon that will cheer investors up in 2022 and that will “dictate the quotation of major cryptocurrencies.”
Cheap Money Threatens Bitcoin
Anthony Trenchev, a partner at crypto bank Nexo, is in line with the view that “the monetary policy of central banks is the number one factor that stops an asset’s price from rising or falling.”
For Trenchev, “there are signs that cheap money is here to stay, something that has huge implications for cryptocurrencies.” “With the Fed not having the guts or the backbone to withstand a 10%-20% crash in the stock market, as well as the backlash in the bond market, it looks like this is going to be a busy year for bitcoin.” Defending the entrepreneur.
However, the analyst believes, based on various technical analysis indicators, such as the use of “momentum”, that “Bitcoin could reach $100,000 by June 2022.” On the other hand, Trentchief does not anticipate the same fate for other “cryptostars” from 2021, such as Solana and Avalanche, which recorded four-digit weekly highs. “It will be a year of growth primarily for Ethereum and Bitcoin,” he adds.
Jeffrey Haley, chief market analyst at Oanda Asia Pacific, is more cautious in his forecasts. In an interview with Bloomberg, he highlighted that “2022 will be the year of continued growth for cryptocurrencies, even though the macroeconomic environment is more challenging this year.”
“The main challenge will be the normalization of interest rates by the Federal Reserve and other central banks, which could motivate investors to switch to other assets, and the second biggest challenge will be regulation, which if achieved in 2022, could limit the growth of this market,” the analyst explained.
Last year, the US administration took the first step towards regulating cryptocurrencies, by approving a document containing “preliminary conclusions” on the cryptocurrency market. In October, Jerome Powell assured the US Congress that “cryptocurrencies will not be banned but will be subject to law.”
On the “Old Continent,” the European Commission has submitted a proposal to the MiCA (English acronym for European Commission Regulation of Markets in Crypto Assets), a regulation that governs this market in the European bloc.
Despite the pandemic, the Chinese ban, and the volatility caused by Elon Musk’s tweets, 2021 was a boom year for the virtual asset market. The prominent Bloomberg Galaxy Cypto Index (BGCI), one of the world’s most respected cryptocurrency indexes, grew 201% from January to December 3.
According to a forecast by Bloomberg, included in the “World Cryptocurrency Outlook 2022”, the proliferation of revolutionary technologies, such as Stablecoins – virtual assets, the quotation of which is directly linked to the price of another asset – and NFTs (non-fungible tokens) will be the starting point for price growth.
For Bloomberg analysts, there are clear signs that Bitcoin will also be favored by the new macroeconomic scenario in 2022. Experts point to a support line around $50,000, and a resistance line at $100,000.
The report reads: “Bitcoin will continue to face strong winds, with prices expected to continue to decline, but everything indicates that depreciating central bank policies will favor the cryptocurrency in the long run.”
The report notes that bitcoin has managed to weather major setbacks this year, pointing to “bullish” predictions for 2022. Insurance, like the United States and Canada, experts wrote.
According to Bloomberg, “It is only a matter of time before the price of Bitcoin reaches $100,000.” “Potential Path for Bitcoin” [num futuro não datado] It is settling at a level equal to 100 times an ounce of gold (about 170,000 euros). However, analysts do not deny that after this phenomenon, another cyclical decline is very likely.
On Tuesday, Bitcoin continued to drop 0.19% to $46862.91.
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