Categories: Business

Bitcoin Faces Uncertain 2022 After Record Year

This file photo taken on February 6, 2018, shows a visual representation of the digital cryptocurrency Bitcoin, at the “Bitcoin Change” shop in the Israeli city of Tel Aviv. PHOTO: JACK GUEZ / AFP


The price of bitcoin hit record highs in 2021 thanks to support from traditional finance, but cryptocurrency specialists are struggling to predict next year’s outcome for the volatile sector.

Having more than trebled in value to $60,000 between December 2020 and April, bitcoin has lost some shine to trade at under $50,000 heading into the new year.

“The current choppy and directionless price action with a possibility of further pressure to the downside has introduced a lot of uncertainty to the digital asset market,” noted Loukas Lagoudis, executive director at cryptocurrency investment fund ARK36.

READ ALSO: World Ushers In 2022 After Another Pandemic-Ridden Year

He added, however, that “sustained adoption of digital assets by institutional investors and their further integration into the legacy financial systems will be the main drivers of growth of the crypto space” during 2022.


– ‘No certainty in crypto’  –

Bitcoin’s rise in 2021 coincided with Wall Street’s growing appetite for cryptocurrency.

The record high in April occurred with the stock market debut of cryptocurrency exchange Coinbase.

October’s peak above $66,000 followed the launch of a bitcoin futures exchange-traded fund (ETF), or type of financial instrument, on the New York Stock Exchange.

Tesla boss Elon Musk helped the market rise — and fall — with controversial tweets about cryptocurrencies.

The move by El Salvador in September to make bitcoin a legal tender also made an impression.

But pressure has come from China’s crackdown on the trading and mining of cryptocurrencies, while the risk of wider regulatory action, from the likes of Europe and the United States, weighs on bitcoin.

“There is no certainty in crypto, never mind regulation,” said Huong Hauduc, general counsel at digital assets exchange Bequant.

“However one thing is certain, the voices calling for crypto regulation, whether it be for tighter consumer protection or just clarity of the rules for institutions, are getting much louder.”

Created following the 2008 global financial crisis, bitcoin initially promoted a libertarian ideal and aspired to overthrow traditional monetary and financial institutions such as central banks.

In more recent times, climate change watchers have shone a spotlight on the huge amount of electricity used to power computers required to unearth new bitcoin tokens.


– More competition –

Bitcoin is at risk of increased competition as it enters 2022, especially from its closest rival ethereum, according to some analysts.

In November, Twitter co-founder and CEO Jack Dorsey announced his departure from the social media platform, leaving him to concentrate on his digital payments firm as it looks to expand into cryptocurrency.

For now, bitcoin remains the dominant player.

According to the specialised site CoinGecko, the cryptocurrency sector has a market value totalling $2.36 trillion, with bitcoin worth a combined $900 billion.

For analyst Frank Downing, “bitcoin’s reluctance to evolve its design” compared to the likes of ethereum, is in fact “a feature that provides the stability and consistency required to serve as a true global money”.


Ronke Idowu

Disqus Comments Loading...
Published by
Ronke Idowu
Tags: Cryptocurrency Record Year traditional finance

Recent Posts

  • Crime Watch

Police Investigate Murder Of APC Chieftain In Akwa Ibom

The police in Akwa Ibom have commenced a probe into the murder of the All Progressives Congress (APC) in Akwa…

10 mins ago
  • Sports

Wolves Beat Man Utd To End Rangnick’s Honeymoon

  Wolves ended Ralf Rangnick's unbeaten start as Manchester United interim manager on Monday as Joao Moutinho's strike earned a…

22 mins ago
  • Sports

Thiago Silva Extends Chelsea Contract To 2023

  Chelsea centre-back Thiago Silva has extended his contract with the European champions by one year to the end of…

30 mins ago
  • Crime Watch

One Killed As Police Repel Attack On Imo Traditional Ruler’s Palace

One person has been killed as police operatives repelled an attack on the palace of Ezeimo, HRH Dr. E.C Okeke…

36 mins ago
  • Info Tech
  • World News

Apple Becomes First US Company To Reach $3trn Valuation

  Apple became the first US company to hit $3 trillion in market value, briefly reaching the landmark on Monday in…

1 hour ago
  • Headlines
  • Local

Name And Prosecute Terrorism Financiers, Ndume Tells FG

The Chairman, Senate Committee on Army, Senator Ali Ndume has asked the Federal Government to name and arrest those that…

1 hour ago