Despite a war erupting in Europe, repercussions of the COVID-19 pandemic continuing and consumer sentiment at dismal levels, there is one silver lining for 2022. It’s my forecast for cryptocurrency.
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Prediction For Bitcoin
I joined the panel of 33 other crypto and blockchain experts from around the world in the Finder’s Bitcoin Predictions Report. The report found BTC is expected to reach $76,360 by the end of the year – hitting the same mark as my prediction of $75,000. This is almost double the current value of about $38,000 (as at 28 February 2022).
Since the last peak in November 2021, when BTC hit a record $68,790, the leading cryptocurrency has been trending downwards, causing some to speculate anticipation of a prolonged bear market. This could be the case, as it has happened before. But I don’t believe Bitcoin is in a bubble, and 58% of the panelists agree.
Despite the lull, 45% of the panelists believe BTC will still perform the best out of all cryptocurrencies, while 15% say it will be ETH. I personally believe USD Coin (USDC) will be the strongest.
US dollar-pegged stablecoins will almost always out-perform cryptocurrency and equities markets during a prolonged bear market in terms of value preservation.
If there was a bear market, Bitcoin could recover some market dominance that has seeped into the broader alt-coins space, perhaps with the exception of Ethereum (ETH), Avalanche (AVAX), Fantom (FTM) and Solana (SOL). These 4 cryptos are in high competition to solve for highly scalable smart contracts and low transaction fees.
The report also found strong confidence in BTC continuing to increase in value over time, with the average panel forecast of $192,800 by the end of 2025, and I’m even more bullish with a $350,000 prediction.
The panel predicts BTC will hit $406,400 by 2030, while I forecast it could reach $1 million.
The Value Of Cryptocurrencies
Cryptocurrencies are proving to be a staple competitor to the traditional financial infrastructure of the world, and many projects are now well beyond the theoretical realm of potential value and into reliable delivery.
While bank interest rates might increase the cost of borrowing, one powerfully unique aspect of the crypto landscape is that there is now a number of decentralized finance (DeFi) platforms that provide access to highly competitive funding, and these offerings are showing zero signs of slowing down.
For instance, according to DeFi Pulse, the total value locked in DeFi projects is about $75 billion at the time of writing – roughly 60% growth in the past year. What’s more, there was over $11.6 trillion worth of transactions on the Ethereum blockchain in 2021, more than Visa, which settled $10.4 trillion.
However, the ecosystem has not yet breached sufficient distance to be removed from the impact of macroeconomic trends. This will remain the foundational decider as to whether the bull market of crypto can resume in the next 6 months or if it becomes more realistic to expect this in 2023 and beyond.
While half the panelists expect rising interest rates will not negatively impact the price of BTC, I’m sitting with the unsure camp (31%), and 19% believe it will.
Despite this, 61% say it’s a good time to buy, including me. A further 29% say HODL while 10% say sell.
One thing is for sure: almost nothing will stop the amount of investment being made from within the blockchain ecosystem among peers, as people with deep passion and technical understanding continue to happily build through the colder nights, confidently warmed in the knowledge they're far from alone.
And the panelists are with them, as 71% believe the best-performing investments for 2022 will be crypto and non-fungible tokens (NFTs) – 45% of which was crypto and 26% NFTs.
Interestingly, only 1 in 5 (19%) of the panelists are most bullish on Bitcoin in 2022. A further 19% are most bullish on Layer 2 tokens, 16% for Layer 1 tokens and 16% for the metaverse.
I have mixed emotions. I believe the metaverse will likely be the theme for 2022; however, understanding the nuances in the different approaches and capabilities between Layer 1 and 2 protocols will likely prove a valuable investment. These technologies will set the foundations for everything metaverse, NFT and DAO that come on top in future.
About the author
Fred Schebesta is a co-founder of Finder, a global fintech. Fred also spearheaded the group’s venture capital arm, Finder Ventures and led the launch of cryptocurrency brokerage HiveEx.com in 2018. His most recent project is helping to launch NFT gaming platform Balthazar. Fred's honours and accolades include LinkedIn Top Voices of Australia 2020, Australian Financial Review's Young Rich List 2019 and 2020, and Blockchain Australia's Entrepreneur of the Year Award in 2019.