What to expect in 2022 for bitcoin investors? Bitcoin’s value has plunged by 11 percent in just a few days. During the first week of 2022. With the cryptocurrency completing the week at approximately $42,000. More than 40 percent below its all-time high reached last autumn.
According to cryptocurrency industry observers,. Many investors have liquidated their bitcoin holdings and transferred their assets. To more secure investments as a result of the Federal Reserve’s indication. That interest rates may be raised sooner than planned. This week, other digital coins, such as ethereum and ripple. Have also suffered significant losses, with the latter falling by 13.5 percent. And the former falling by 9 percent, respectively.
Many analysts believe that these massive fluctuations will persist long. Into the next decade due to the extreme volatility of the cryptocurrency market. Which is expected to remain for the next decade.
In an interview with CBS MoneyWatch, Ryan Firth. A financial adviser with Mercer Street Financial. Stated that “it’s simply part of the game.” “One of the most important things to remember. Is to keep your wits about you and go into the situation with your eyes wide open. Seeing 80 percent decreases. In a couple of days is a possible, but “”it will take months.”
Cryptocurrency investors had a busy year in 2021
For cryptocurrency investors, the year 2021 was a busy one. With a lot of activity. Bitcoin reached a new high of $69,000 in November. While ethereum reached a record high of $4,404 in October. It is according to CoinDesk.
Several large retailers have begun taking cryptocurrency as payment. Which is a sign of the currency’s increasing relevance. Some athletes and politicians began accepting portions of their salaries. In cryptocurrency, while Wall Street began establishing exchange-traded funds. Based on cryptocurrency futures contracts.
As the value of bitcoin, ethereum, and other cryptocurrencies surged. Cryptocurrency startups made headlines by announcing major initiatives. Coinbase went public on the Nasdaq in April. And Crypto.com ran a commercial. With Hollywood actor Matt Damon to promote the cryptocurrency.
Crypto.com purchased the naming rights to the Staples Center in Los Angeles and renamed. The sports stadium Crypto.com Arena in a $700 million deal. Which was possibly the most significant move in the crypto world to date. To close off the year of 2021.
Blockchain analytics firm Arcane Research forecasted in a research report. That “we will witness even more crypto firms coming public in 2022. Than we saw in 2021, and several of them. Will have valuations of more than $5 billion.”
Arcane also believes that additional cryptocurrency exchange-traded funds (ETF). Which are on the horizon, providing investors. With a means to test the waters while minimizing the downside.
What to Expect on Don’t look down
Although Firth invests in crypto, he advises his clients to only invest 5% of their portfolio. In such a risky asset. “You still have to plan for that dramatic decrease. Of over 50% in a matter of a week or so,” he said.
Nashville-based project manager Andrea Hardison says. She predicts major price swings in bitcoin in 2022. Even if some of her crypto assets have already risen in value. Hardison expects to keep investing in hex, bitcoin, solana and ethereum.
Crypto market volatility doesn’t bother Robert White III. A St. Louis workforce development case worker. To buy bitcoins, White plans to have a percentage of his wages withheld.
“I will be consistent and steady,” said White. Who acquired his first bitcoin for $1,100 in 2017. “I’m aiming for a three-fold return. But crypto is so volatile it may go in many directions in a day.”