Considering all things, The king crypto – Bitcoin had a pretty good year by facing both ups and downs. Bitcoin is up nearly 70% since the start of 2021 which drives the entire crypto market to a combined $2 trillion in value.

Some important milestones that has to be noted in this year are the approval of the first U.S. exchange-traded fund linked to bitcoin, first major crypto company go public –  Coinbase in April and the increased participation from Wall Street banks like Goldman Sachs

On the other hand, regulatory scrutiny has impacted bitcoin’s adversely. That said, experts also warn the market might be heading toward a downturn.

With the New Year rapidly approaches, people are eager to know on how bitcoin will behave in the upcoming year 2022. Now lets have a look on what experts predicts about Bitcoin next year.

Analyst predict Crypto crash

According to Carol Alexander, professor of finance at Sussex University says Bitcoin is no more than a “toy” investment, since it “has no fundamental value.” She also added history is set to repeat itself, citing the Bitcoin trade in 2018 when it dropped close to $3,000 after reaching a $20,000 high.

She also pointed at that coins like Ethereum, Solana, Polkadot and Cardano might eventually replace Bitcoin in 2022.

As per CNBC, She said “as retail investors begin to realize the dangers of trading bitcoin, especially on unregulated venues, they will switch to… other coins belonging to blockchains which actually serve an essential and fundamental role in decentralized finance.” Todd Lowenstein, chief equity strategist of Union Bank’s private banking arm said “Without question, Bitcoin’s price chart appears to track many historical asset bubbles and busts and is carrying a ‘this time it’s different’ narrative just like other bubbles.”

Expectation of Regulatory crackdowns

China, the world’s largest crypto market, banned all transactions in September. Meanwhile, the U.S. authorities cracked down on certain aspects of the crypto market. Elsewhere, In India, the government has worked on a legislation to regulate use and trading of cryptocurrencies.

Also Bank of England policymakers led by Andrew Bailey have warned of the dangers of investing in such assets. 

Analysts widely expect regulation to be a key issue which will be faced by Bitcoin in 2022 .

Central banks are also looking at launching their own digital currencies, which would be negative for crytpo as these could usurp some of the perceived benefits of Bitcoin, such as speed of payments and transaction costs, particularly across borders.’

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‘DeFi’ growth to continue

It is worth noting that a lot of investors are getting interested in Emerging crypto developments such as decentralized finance (DeFi) and decentralized autonomous organizations more than Bitcoin’s system. That said, DeFi services surpassed $200 billion this year, which indicates a strong support among investors and experts predict its demand to grow further in 2022.

Future of Bitcoin

All the factors paired up with regulatory rules are expected to work as major catalysts on Bitcoin’s trading value. However, as previously mentioned, Bitcoin is highly volatile, so it is hard to determine whether these predictions would prove true.