So far, bitcoin has had a poor year. It’s down nearly 45% since November 2021. Ethereum’s value has fallen by half since November’s highs. This has sparked debate over whether we’re in a bear market or just experiencing a normal market pullback.
According to Coinstack publisher Ryan Allis, we may be in a bitcoin supercycle. He claims this since he runs HeartRithm and publishes Coinstack.
The value of Bitcoin (BTC) usually lowers in the third year after every halving occurrence (every four years). This is done to reduce the amount of money sold on the market. Following a halving event, the price of BTC has risen for 12-18 months, then fallen. Despite the fact that BTC will have another down year in 2022, Allis believes this cycle will not repeat.
What is the Reason?
Bitcoin’s market share is dwindling. In December 2017, BTC accounted for 70% of the crypto market. Since then, it has decreased to 40%. Solana, Avalanche, and NEAR are smart contract platforms that offer faster transaction speeds than Ethereum.
DeFi is also growing rapidly, which is the second reason. It had no cash when it began four years ago. DeFi now has over $230 billion in funds. Outside of the regular money system, people can lend and borrow and earn interest using crypto. This is also where gaming cryptos and the metaverse make money in the digital realm.
Third, DeFi gives yield hunters additional chances. Investors in DeFi can make between 12 and 18 percent, compared to 0 to 3 percent in traditional finance.
In the US, it’s 30 years high. Bitcoin’s annual inflation rate is 1.4 percent, whereas Ethereum’s is 0.9 percent. (ETH). In 2022, ETH should be a good currency.
Fifth, traditional finance has several flaws. Sending an international wire using SWIFT still takes two days. A stock trade also takes two days. Better financial technology requires 24/7 markets. Blockchain and asset tokenization can do this. The tokenization of all financial assets is imminent. Stocks, bonds, and real estate are examples of assets. Remittances to Africa cost between 5% and 7%. This is a market in serious need of transformation.
It’s the last one. Follow the developers to find out where the action is. More people are working in blockchain and Web 3. (Which is a more decentralized version of the current internet, where people control their own data rather than handing it over to tech giants for free).
Brett There are many reasons to believe bitcoin will continue to rise. Hope Robertson, an analyst at Revix, agrees.
Bitcoin 2022 Forecast
In 2022, Allis expects digital asset investing to prosper. We should predict reductions of 30-50% every 6-9 months, but not as much as in 2014 and 2018. We shouldn’t expect 85% drops as in 2014 and 2018. Smart contracts, open-source code, and blockchains will build a new financial system this decade. Joining this narrative is exciting. If you want to reduce the volatility of your entire crypto portfolio, you can invest in USDC and earn 8% to 10% on BlockFi, Celsius, and Nexo.
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