What are the most predominant questions to consider while talking about trading or investing in cryptocurrencies? Probably, those ones: What is cryptocurrency and crypto trading and what are the predictions for buying/selling crypto assets?
Cryptocurrency-related Predictions for 2022
Bitcoin in 2022
Analysts note that in 2021, Bitcoin outperformed the S&P 500 in terms of returns. During 12 months, the first cryptocurrency has risen in price by 65%, while the index has grown by 28%. Bitcoin will continue to outperform the S&P 500 in 2022.
XRP and Cardano in 2022
In 2022, XRP and Cardano (ADA) tokens will leave the list of the top 10 largest cryptocurrencies by capitalization. Analysts came to this conclusion based on the significant growth of other tokens, such as
- Solana (+11,538% per year)
- Terra (+13,728% per year) and
- Binance Coin (+1394% per year).
In 2021, XRP and Cardano tokens have risen in price by 246% and 695%, respectively.
At the end of 2021, the US Securities and Exchange Commission (SEC) accused Ripple of selling unregistered securities worth $1.3 billion under the guise of XRP tokens. The Ripple CEO suggested that the trial would end in 2022.
Crypto Companies on the Stock Market in 2022
Large initial public offerings of crypto companies on the stock market are expected in 2022. According to analysts, representatives of the cryptocurrency sector will want to repeat the success of Coinbase, which in April 2021 became the world’s first public crypto exchange.
The trading platform has made a public listing on NASDAQ (with no IPO procedure). At the peak, the value of the company’s shares reached $429.5, then they moved into the stage of decline. As of December 2021, the premarket price of securities of the first public crypto exchange is $261. The capitalization of the crypto exchange is estimated at $56.2 billion.
2022 Hashrate’s Geographical Distribution of Strengthening
Before the complete ban on mining in China, the country accounted for about 70% of the bitcoin hashrate. The leadership in the production of the first cryptocurrency passed to the United States (35.4%). The second and third places were taken by Kazakhstan and Russia (18% and 6.8% respectively).
Analysts say that the relocation of miners will continue, and the geography of their move will increase. One of the promising regions for mining is Latin America.
Main Reasons of Crypto Market Collapse
Ban on Mining in China
After the ban on mining in China, Kazakhstan came in second place in terms of capacity for mining cryptocurrencies after the United States. The protests in Kazakhstan had a negative impact on the cryptocurrency market at the beginning of 2022. The country accounts for 18% of the global mining capacity.
Kazakhstan’s Unstable Political Background
At present, in Kazakhstan, the Internet is working intermittently, and the banking system is functioning with restrictions. Experts expect mining to recover once the situation stabilizes.
The Fed
However, the more significant reason for the fall of cryptocurrencies is the Fed’s tough mood to tighten monetary policy. At the beginning of January 2022, following the meeting, the regulator published a protocol from which its intention to quickly increase the interest rate and reduce the volume of assets on the balance sheet became clear.
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This, in particular, led to an outflow of investors’ funds from risky assets. Thus, the NASDAQ Composite index for the week fell by 4.5%. Bitcoin followed stocks of large technology companies.
What is more, additional pressure on the market was exerted by the decision on the registration of the NYDIG exchange-traded fund focused on investing in bitcoins, which was postponed by the SEC for two months.
Possible Ways of Crypto Market Backing on Previous Track
Many factors influence the development of the cryptocurrency market. These can be new financial injections into a decentralized coin, a decision by different countries to ban electronic coins, or a complication of the situation in the world community due to the situation with the pandemic.
To date, the most popular Bitcoin coin has a high value. Such factors allow the market to develop further, since all the others depend on the growth of this coin. For example, all child coins will also rise in value.
Among all the factors that can influence the popularization and development of the electronic money market, there are several key points. All of them perfectly directly or indirectly affect the financial component and regulate the growth or decline of interest in this monetary unit.
Investments have always been the highest quality and most promising growth stimulator of electronic money. Similar prospects are perfectly visible on the example of Bitcoin. The most discussed topic of this year was the possible purchase of a digital coin by Tesla, owned by Elon Musk.
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The next moment for development today and in the future for the next year is the activity in buying up coins and forming portfolios by large companies. This creates a positive outlook for the market. It is not only constantly updated with new clients, but also allows you to maintain the required activity on the exchange.
The situation with the coronavirus has become direct evidence that the instability of the dollar before crises will be the starting point in moving the assets of large entrepreneurs to cryptocurrency funds. They proved to be more reliable during the period of isolation measures.
In 2022, all participants in the cryptocurrency market will actively monitor macro statistics in America. Such analyzes will make it clear how much the delta virus and the spread of this strain will affect the initiative of business owners and consumers. Their decision will determine how active the market will be next year, given the continued high inflationary position.
If you think logically, then one can say with confidence that the most promising is the Bitcoin cryptocurrency. It confidently holds its position in this market and is characterized by constant growth. For large companies, it will remain the leader in 2022.
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