What is the Future for Cryptocurrencies in 2022 and Beyond According to the Experts?
Cryptocurrencies have dominated financial news headlines for a very long time. It seems like they are the type of topic that people can’t seem to avoid. This is because cryptocurrencies are one of the newest types of investments that a person can make, and there are a fair number of people who are making significant amounts of money for themselves in these markets. Thus, the number of people who track cryptocurrencies continues to grow, and the thirst for predictions about where these currencies are headed next is difficult to quench. So, what does the landscape look like for cryptocurrencies in 2022?
Markets Are Opening In India
One exciting piece of news for cryptocurrency enthusiasts is that the market for trading cryptocurrencies in India appears to be opening. Until this point, cryptocurrencies had not been regulated by the government of India, and India’s Prime Minister Modi suggested just months ago that cryptocurrencies are dangerous and should potentially be banned. Those statements were made in November, but the government has taken a dramatic shift in tone since that time. Reporting on February 1, 2022, from the Washington Times suggests that the government has pulled a 180-degree turn on the subject, saying:
The Indian government announced plans Tuesday to tax cryptocurrency income, making India the latest major country to move swiftly toward legalizing and regulating the digital asset. At the same time, the country will roll out its own blockchain-based currency, a digital rupee controlled by the Indian central bank, before April 2023, Finance Minister Nirmala Sitharaman said Tuesday. She did not provide more details.
What this suggests is that perhaps the country sees the tidal wave of cryptocurrencies as inevitable, and they want to participate in the movement themselves. The government may see the value in cryptocurrencies, and it may want to stake its claim on regulating and taxing these instruments themselves. If so, this could mean that the third-largest economy in Asia could soon become a major center for cryptocurrency trading. Legal access to cryptocurrency markets may be open to nearly 2 billion more people, which could propel the prices of many currencies even higher.
How Did Cryptocurrencies Do In 2021?
Cryptocurrencies went on a wild ride in 2021. The benchmark currency that most people look at for judging the entire cryptocurrency market is Bitcoin, since it is the coin that started it all. There were some other notable flash-in-the-pan type stories, such as the wild ride that meme coin Dogecoin took in early 2021, but Bitcoin remained the story to watch throughout the year.
Bitcoin started 2021 by jumping to it’s all-time high of about $64,000 per coin in the first half of the year. However, it quickly dropped back to around $30,000 per coin by the summer. It turned around and came back to a new all-time high of approximately $68,000 by November 2021, but it reversed again and was trading around $35,000 in January of 2022. The overused roller coaster metaphor is apt for the kind of journey that Bitcoin took this year.
There was plenty of volatility in many cryptocurrencies, and those movements made a lot of people pretty great returns if they knew how to trade it just right. The thing about this is that sometimes volatility is precisely what certain traders want. If they can find just the right edge, they can potentially stack up a sizable amount of money from their trades. Certain spectators may look at the $35,000 price tag that Bitcoin showed as of January and assume that this means that Bitcoin had a bad year, but that is only true if you are a long-term holder of the coin, which most people are not. Those who trade in and out of it have done just fine.
What Will Cryptocurrencies Do In 2022?
This is the million-dollar question, isn’t it? If anyone knew with absolute certainty what cryptocurrencies would do in 2022, then there would be no suspense and no need to speculate, but that is not how markets work. No one knows for certain, but we can get a rough idea of what may happen when we look at how the experts view these markets and what they believe could happen with them.
A panel of experts was polled on the question of where they felt Bitcoin would end up at the close of 2022 as well as several years into the future, and they came back with the following averages:
- End of 2022: $76,360
- End of 2025: $192,800
- End of 2030: $406,400
These are just averages, with some experts deviating wildly from the group average, and that is very important to keep in mind here. That said, the optimism in these numbers is extraordinary, and the fact remains that many people remain highly encouraged by what they see in the cryptocurrency markets despite some naysayers.