Bitcoin (BTC) has had another volatile year, reaching new highs, but also registering dramatic drops. It looks like it will finish over 60% up for 2021, a significant increase at the start of the year. Here is Bitcoin Forecast for 2022.
But what can we expect for 2022? We’ve pulled together the good, the bad, and the ugly of Bitcoin forecast. Find out what may be in store for the popular coin in the coming year.
During the last ten years, we have been witnessing massive changes in the cryptocurrency sector. BTC, for example, went from being an interesting experiment for a mainstream investor portfolio mainstay to a new asset class and digital gold.
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Bitcoin Forecast: What is the purpose of Bitcoin?
Satoshi Nakamoto created Bitcoin as a way for people to send money over the internet. The digital currency intends to provide an alternative payment system that would operate free of central control but otherwise will use just like traditional currencies.
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Bitcoin Forecast: Are Bitcoins safe?
The cryptography behind bitcoin is based on the SHA-256 algorithm designed by the US National Security Agency. Cracking this is, for all intents and purposes, impossible as there are more possible private keys that would have to be tested (2256) than there are atoms in the universe (estimated to be somewhere between 1078 to 1082).
There have been several high-profile cases of bitcoin exchanges being hacked and funds being stolen, but these services invariably stored the digital currency on behalf of customers. What was hacked in these cases was the website and not the bitcoin network.
In theory, if an attacker could control more than half of all the bitcoin nodes in existence then they could create a consensus that they owned all bitcoin, and embed that into the blockchain. But as the number of nodes grows this becomes less practical.
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A real problem is that bitcoin operates without any central authority. Because of this, anyone making an error with a transaction on their wallet has no recourse. If you accidentally send bitcoins to the wrong person or lose your password there is nobody to turn to.
Of course, the eventual arrival of practical quantum computing could break it all. Much cryptography relies on mathematical calculations that are extremely hard for current computers to do, but quantum computers work very differently and may be able to execute them in a fraction of a second.
Bitcoin will hit $100,000
CEO of Voyager Digital Steve Ehrlich told the Independent he thinks the ups will outweigh the downs next year. For him, Bitcoin is the face of the crypto world, and he thinks it will surpass $100,000.
There are many optimistic Bitcoin forecasts, though some experts aren’t as willing to be pinned down to a time frame. For example, MicroStrategy’s Michael Saylor, a popular Bitcoin bull, believes BTC will eventually hit $6 million, but he doesn’t say when.
Kraken CEO Jesse Powell told Bloomberg people to need to think of Bitcoin as a five-year investment. “It’s up and down day to day, week to week. You don’t want to be trading this in a short time frame,” he said. “It’s more of a buy-and-hold investment.”
And — as is often the case with crypto — others believe a price crash is imminent. One finance professor at Sussex University told CNBC that the granddaddy of cryptos could sink as low as $10,000 next year. She says crypto is more of a toy than an investment.
She’s not the only one warning investors that Bitcoin’s price could fall to zero. In a recent guest post for the Financial Times, Robert McCauley wrote that Bitcoin is worse than a Ponzi scheme, in part because of its environmental impact. McCauley is a non-resident senior fellow at Boston University’s Global Development Policy Center.
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Bitcoin will be adopted by even more people
Ric Edelman, the founder of the Digital Assets Council of Financial Professionals, published several predictions for 2022. One was that more than 500 million people worldwide will own Bitcoin by the end of the year. He’s not alone. According to CoinTelegraph, BlockFi co-founder Flori Marquez believes regulatory clarity and improved understanding of the industry will drive increased adoption.
We may also see more countries following El Salvador and accepting Bitcoin as legal tender. And many, like Naavik co-founder Abhimanyu Kumar, think the growth of Blockchain gaming will lead more people into crypto. “It’s going to lead the adoption curve because of the nature of the medium. It’s entertaining and it’s fun. It makes crypto easy to grasp,” he told Blockworks.
That said, outspoken Bitcoin critic and CEO of Euro Pacific Capital Peter Schiff pointed out that increased investor interest is, in part, a result of the amount of news coverage. “CNBC is ‘reporting’ on the widespread increase in investor interest in Bitcoin during 2021, without acknowledging its contribution to driving that interest,” he tweeted. “CNBC featured non-stop bullish coverage, constant pumping by guests, and an aggressive Bitcoin advertising campaign!”
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Bitcoin will lose market dominance
One theme that’s become clear in 2021 is that the crypto industry is more than just Bitcoin. At the start of 2021, Bitcoin made up 70% of the total market cap. Now that figure is more like 40%, according to CoinMarketCap data. This is in part due to the thousands of new coins that have been created, but mostly due to the growth of smart contract platforms like Ethereum (ETH), Cardano (ADA), and Solana (SOL). More and more projects are being built on these platforms, giving them a bigger share of the market.
Diogo Monica, president and co-founder of Anchorage Digital, told MarketWatch, “It’s no longer just speculative investing in Bitcoin or Ethereum; we’re talking about NFTs (non-fungible tokens), DeFi (decentralized finance), remittances, capital preservation, and many other verticals.”
There are many moving parts in crypto, from the booming NFT market to the growth of DeFi and metaverses. Bitcoin may serve as digital gold for this evolving industry. But it also may get replaced by newer, faster coins.
Bitcoin maximalists like Jack Dorsey feel that most other cryptos go against the spirit of the original digital currency. He champions Bitcoin over all other coins, believing the first-ever crypto could one day be the native currency of the internet.
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Increased regulation is coming
We’ve given both sides of predictions so far, but there are very few people who suggest more regulation is not inevitable. The opinion isn’t so united on whether this is a good thing.
Many industry players hope for clearer regulation that would help build investor confidence. Some, like billionaire investor Mark Cuban, argue that regulation is necessary, especially around stablecoins.
And Charlie Munger, vice chairman of Berkshire Hathaway and the man who said Bitcoin is “disgusting and contrary to the interest of civilization” advocates more extreme measures. He recently said he thought China was right to ban the coin. “They’re right to step out, step hard on booms, and not let them go too far. The extent that my country doesn’t do that we’re inferior to China,” he said.
Still a lot of unknowns
Whether you believe Bitcoin is on the cusp of a new breakout or the verge of collapse, one thing is certain: Cryptocurrency remains a divisive topic.
If you’re considering buying Bitcoin, research the industry and understand the risks involved. We don’t know what impact increased regulation will have, or what form that regulation will take — and there’s still a chance that other technologies could take the wind out of Bitcoin’s sails.
Buy from a reputable cryptocurrency exchange, and don’t spend more than you can afford to lose. That way, you minimize the risks of getting badly burned if things go wrong.
Emma Newbery owns Bitcoin, Ethereum, Solana, and Cardano. The Motley Fool owns shares of and recommends Bitcoin.
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Buy and sell crypto on an expert picked exchange
There are hundreds of platforms around the world that are waiting to give you access to thousands of cryptocurrencies. And to find the one that’s right for you, you’ll need to decide what features matter most to you.
Bitcoin cloud mining
Bitcoin Cloud Mining is the process that maintains the bitcoin network and also how new coins are brought into existence.
All transactions are publicly broadcast on the network and miners bundle large collections of transactions together into blocks by completing a cryptographic calculation that’s extremely hard to generate but very easy to verify. The first miner to solve the next block broadcasts it to the network and if proven correct added to the blockchain. That miner will then reward with an amount of newly created bitcoin.
Inherent in the bitcoin software is a hard limit of 21 million coins. There will never be more than that in existence. The total number of coins will be in circulation by 2140. Roughly every four years the software makes it twice as hard to mine bitcoin by reducing the size of the rewards.
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When bitcoin was first launched it was possible to almost instantaneously mine a coin using even a basic computer. Now it requires rooms full of powerful equipment, often high-end graphics cards that are adept at crunching through the calculations, which when combined with a volatile bitcoin forecast can sometimes make mining more expensive than it is worth.
Miners also choose which transactions to bundle into a block, so fees of a varying amount are added by the sender as an incentive. Once all coins will mine, these fees will continue as an incentive for mining to continue.
The Bitcoin network was introduced to the world in 2009 by an unknown individual or group called Satoshi Nakamoto. In 2021, there are more than 10,000 different projects in the field of cryptocurrencies, each of which, having its role in building the future of money.
The market value of cryptocurrencies reached $ 1 trillion for the first time in January 2021 and passed $ 2.5 trillion in less than three months later, which shows that this market is one of the growing markets in the favor of its investors.
Bitcoin Cloud Mining is the process by which you participate in a mining pool to a cloud miner website and purchase a certain amount of hash power. In this pool, the profit will distribute equally among all participants who have participated in the mining pool based on hash power. The cloud miner platform allows you to mine your Bitcoin without installing any hardware and at no extra cost. Minerland, the best crypto cloud mining service, helps you invest in Bitcoin easily and with low risk.