Panel’s forecast for the end of 2022
Bitcoin (BTC) is expected to peak at US$93,717 this year before dropping to $76,360 by the end of 2022, according to Finder’s panel of 33 fintech specialists. This is roughly 60% higher than the price of Bitcoin at the beginning of 2022.
Panel less bullish on forecast for 2025 and 2030
By the end of 2025, the panel predicts BTC will be worth $192,800 and climb to $406,400 by the end of 2030. These are significant increases from BTC’s price at the time of writing in mid-January but much lower than their forecasts from the October report:
See more: Projected bitcoin price
- The panel’s prediction of $192,800 for the end of 2025 is 7% lower than their October forecast.
- The panel’s prediction of $406,400 for the end of 2030 is 28% lower than their October forecast.
Interest rate rises impact predictions
Potential interest rate hikes might be what’s leading the panel to be more conservative with their predictions compared to back in October.
Several panelists, including the Panxora Group CEO Gavin Smith who gave an end-of-2022 prediction of $70,000, think that increasing interest rates will negatively impact the cryptocurrency market.
“[The] first half of 2022 will be dominated by concerns over higher interest rates, which will impact all risk assets including Bitcoin. We wouldn’t be surprised to see Bitcoin decline a further 30% from current levels.”
However, when asked about Bitcoin specifically, just 1 in 5 (19%) panelists think higher interest rates will lead to a lower BTC price and 31% said they were unsure.
Half of the panel (50%) don’t think an increase in interest rates will lead to a fall in BTC’s price.
If higher interest rates do cause a drop in Bitcoin’s price, Smith thinks it will be short-lived.
“As inflation continues to rise, we expect Bitcoin to decouple from other risk assets in the second half of 2022 leading to a rally to new highs towards the end of the year.”
CoinFlip founder Daniel Polotsky agrees with Smith.
“It is possible that the asset bubble the Fed created by keeping interest rates near 0% for over a decade may spill over into Bitcoin. However, the cryptocurrency has the gold-like fundamentals and trust to weather the storm better than its peers. While in the short term, higher inflation will make savings rates lower (meaning less disposable income to spend on investing), in the long run, people will look for alternatives like Bitcoin to escape the inflation,” he said.
Buy, sell or hodl
Now is the time to buy BTC, according to the majority (61%) of the panel. An additional 29% say it’s time to hodl, while just 10% say it’s time to sell.
Several panelists, including Finder’s founder Fred Schebesta, say it’s time to buy BTC.
“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… One powerfully unique aspect of the cryptocurrency landscape is that there are 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,” he said.
University of East London associate professor in law Dr Iwa Salami also acknowledges the rapid growth of the cryptocurrency market but believes this is reason to hold for now.
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“The crypto-asset market has continued to thrive, with increased interest from retail and institutional investors cannot be overlooked and yes, whilst there are still huge regulatory gaps, it is important that the potential of this emerging industry to transform business and finance and to facilitate financial inclusion is not overlooked or undermined.
“The developments in the space such as the evolution of Web 3.0, facilitated significantly by technologies including blockchain, are enabling decentralization, trustless and permissionless transactions and continue to break new ground in business and finance.”
However, a few panelists, including University of Western Australia associate professor Lee Smales, aren’t as optimistic about the future of Bitcoin and say that now is the time to sell.
“Bitcoin seems to be bracing for a large fall. A ‘double top’ seems to have formed and the price could easily give up all of the 2021 gains. Ultimately, I would not be surprised if the price is less than 1,000 in the long term – particularly as there are more useful/efficient alternatives available.”
Technical indicators to consider when trading
If you are planning to buy or sell Bitcoin or other cryptocurrencies, the panel thinks the “moving average” is the most important technical indicator to consider (61%). The next most popular indicators are Bitcoin dominance (57%), the moving average convergence divergence (43%) and the relative strength index (25%).
- The moving average: This is the average change in price on an asset over a defined period of time.
- The moving average convergence divergence (MACD): This is a trend-following momentum indicator showing general bullish or bearish signs in the market.
- Bitcoin dominance: This is Bitcoin’s market capitalization divided by the total market capitalization of all cryptocurrencies. Historically, it has always been above 30%.
- The relative strength index: The relative strength index tells whether a stock is overbought or oversold.
- Bollinger bands: Based on the standard deviation above and below the current moving price, Bollinger bands indicate whether price movements are relatively high or low based on recent price history.
- Fibonacci retracement levels: Fibonacci retracement levels are 23.6%, 38.2%, 61.8% and 78.6%. They indicate possible price points of resistance and support.
- The directional movement index: This is an indicator used to determine the overall direction of the price. It is derived by drawing 2 lines on the price graph DI+ and DI-. How these lines are drawn ends up revealing a conclusion on the direction of the price.
- Stochastic oscillator: This is a momentum indicator that compares the most recent closing price to a range of prices for a defined period. It is a relatively accurate indicator of price movement, especially when combined with the RSI.
With the price of BTC and other cryptocurrencies skyrocketing over the past couple of years, many investors are wondering if the market is a bubble.
Nearly 1 in 3 panelists (30%) in Finder’s survey think there is a bubble, similar to the dot-com bubble of the 1990s. However, the majority (58%) say there isn’t a bubble, with 12% remaining on the fence.
Managing director at Genesis Block, Chloe White, says there are obvious bubble-like characteristics to the crypto boom.
“It is hard to defend the current market capitalization of many of the companies and protocols in the space. But it comes with the territory and reflects where we are at in the adoption cycle. That’s why it’s important for investors to do thorough research and to maintain a long-term perspective.”
Lee Smales thinks investors will soon realize prices have moved beyond reasonable valuation.
“The ability to sell on to a ‘bigger fool’ will become more difficult and prices will fall sharply. This is not to say that cryptocurrencies do not have some value/utility, just that we have moved far beyond. Further headwinds will be found in CBDC and a reduction in monetary policy expansion.”
Balthazar CEO John Stefanidis agrees it’s a bubble but suggests that some businesses will provide value in the long term.
“Like any industry, there are winners and losers. Naturally, we’re seeing a lot of great ideas that won’t be correctly executed, combined with loads of investor money. This can cause a “bubble”. However, over time, we’re starting to see crypto businesses adding tremendous value and better solutions.”
Coins to hold in a bear market
If there were a bubble or another issue that causes the crypto market to experience a downturn, nearly half (45%) say BTC would be the coin to hold should the market experience a downturn.
University of Brighton senior lecturer Paul Levy thinks Bitcoin would be the top performer in a bear market given it’s an established cryptocurrency.
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“In 2021, the total value of digital currencies rose very significantly, and that was during very ambiguous conditions both in terms of financial dynamics but also wider global challenges. There is a probability that conditions will potentially stabilise. That “stability” need aligns in my view most towards the established currencies such as Bitcoin.”
Bitcoin isn’t the only coin our panel thinks would fare well in a crypto downturn. 15% of panelists think Ethereum would be the coin to watch in this scenario.
Daniel Polotsky is part of this group supporting Ethereum and says the most trusted and least speculative projects tend to shine during bear markets.
“Ethereum has the most developers, the most usability and nearly 10 times as much total value locked on its blockchain as its closest competitor. The project is battle-tested and is ready for a bear market, unlike other less-proven coins.”
Meanwhile, other panelists, including Fred Schebesta, pointed to stable coins such as USD Coin and Tether.
“US dollars, or US dollar-pegged stablecoins, will almost always outperform cryptocurrency and equities markets during a prolonged bear market in terms of value preservation.”
Meet the panel
What’s coming up in Bitcoin’s roadmap
Despite having no headquarters, CEO or official development team, Bitcoin is still set to undergo upgrades in the years to come. One thing that can be said about Bitcoin development is that it is slow but deliberate. The latest upgrade to the Bitcoin core codebase was Taproot, which launched on 14 November 2021. The benefits of Taproot are largely yet to be seen, as it will take time for exchanges, wallets and application developers to take advantage of the new features that Taproot has enabled. Put simply, Taproot enables developers to better use in-demand block space, and provides better tools for building and scaling the Lightning Network.
Taproot will also make changes to how transactions work, aiming to introduce an element of privacy as well as improve overall efficiency.
The Bitcoin Lightning Network
The Bitcoin Lightning Network has been in development since around 2015, with the first Bitcoin Lightning transaction taking place in 2017. In 2021 in particular, the Lightning Network grew by more than 300% in terms of the amount of Bitcoin “locked” within the network, as well as number of connected nodes. The more Bitcoin locked and the more nodes on the network, the more scalable and useful the Lightning Network is at providing a transaction layer for Bitcoin.
One such project called LNBits aims to provide similar smart contract functionality that is seen on other networks. Features such as automated payment splitting for royalties and revenue sharing become possible. LNBits describes itself as a project wherein developers can easily make and distribute Lightning based applications. This could include Bitcoin paywalls for content, event tickets and money streaming. LNBits and its associated Bitcoin “extensions” and “plugins” are in beta, and actively being developed.
Bitcoin Oracles aka Discrete Log Contracts (DLCs)
An integral part of Ethereum and any other smart contract enabled platform is the ability to “oraclize” real-world data and use it within smart contracts. While there is no official delivery date for when discrete log contracts will be able to be used within the Bitcoin ecosystem, it is a feature that is actively being developed. The first demonstration of a discrete log contract took place in January of 2020.
Bitcoin Legal Fund
Bitcoin is getting a fund dedicated to fighting legal battles staged against developers and Bitcoin companies. Since Bitcoin has no formal advocacy group or central representative, there is no go-to entity for protecting those who develop and advocate for Bitcoin. Although the Bitcoin Legal Fund is not a technical upgrade per se, the Bitcoin Legal Fund is an integral part of the structure of a truly decentralized autonomous organization (DAO). The legal fund was proposed by Jack Dorsey, although it is yet to reach any formal state of establishment.
The cryptocurrency sphere is crowded and becoming increasingly competitive all the time. If you’re thinking of buying Bitcoin, it’s important to be aware of the influences (both positive and negative) that the actions of competitors could have on the price of Bitcoin. Some of the main competitors to consider include the following:
- Ethereum (ETH). Launched in 2014, Ethereum is a blockchain where developers can build and deploy applications, designed to be a decentralized financial layer of the Internet. Ether (ETH) is used to pay transaction fees and services, and it has long been the second-largest cryptocurrency by market capitalization.
- Ripple (XRP). Ripple offers both a payment network (RippleNet) and a cryptocurrency (XRP), and it aims to allow banks and payment providers to send fast and secure transactions around the world. It has a history as one of the top 5 cryptocurrencies in terms of market capitalization.
- Bitcoin Cash (BCH). Created in August 2017 following a hard fork of Bitcoin, BCH is designed to offer faster and cheaper transactions than BTC.
- Litecoin (LTC). Commonly referred to as “the silver to Bitcoin’s gold”, Litecoin was founded in 2011 and was designed to provide faster transactions than Bitcoin. It has a history as one of the top 20 cryptocurrencies by market capitalization.
- Dogecoin (DOGE). Dogecoin started as a joke, introducing the term “memecoin” to the world. Despite being launched as a protest to highlight that anyone can create a cryptocurrency, it has developed a loyal, cult-like following that has propelled it to become one of the top cryptocurrencies by market capitalization.
If you’re considering buying Bitcoin (BTC), the most important points to remember are to do your research and to make yourself familiar with all the risks involved. Though this digital currency has delivered substantial returns to its early adopters, that’s no guarantee of future growth.
If cryptocurrencies can continue their push into the mainstream and achieve widespread acceptance, not only among consumers but also from governments around the world, this could mean good things for Bitcoin. And if the scalability issues facing the Bitcoin blockchain can be successfully overcome, there seems to be potential for future growth.
However, don’t forget that the cryptocurrency sphere is increasingly crowded, and Bitcoin is sure to face plenty of threats to its title as the world’s number-one cryptocurrency from a host of well-known and professionally backed competitors. Watch this space to see how it all unfolds.
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