Bitcoin: results of 2021 and forecast for 2022


The year 2021 was successful for the cryptocurrency, but not easy. Despite the collapse of the exchange rate by 53%, to $ 28,805, in the second quarter, buyers recouped all losses and updated the maximum by $ 69 thousand. It was not possible to keep the bar at a high level, but by the end of the year bitcoin shows a yield of 72%. Those who took the risk to participate in the rally received a tangible profit, exceeding the interest on bank deposits and inflation by tens of times.

In the year of the metal Bull, a bull market turned out. Crypto investors needed nerves of steel to survive the high volatility in the markets due to the difficult epidemiological situation, lockdowns, rising inflation due to supply chain failures, as well as tightening monetary policies by central banks.

Summing up the results of 2021, I would like to recall the key events that had a strong impact on the dynamics of the market.

– China has banned mining and cryptocurrency transactions.

– Tesla (NASDAQ: TSLA) first started selling electric cars for bitcoin, then refused because of the non-ecological way of mining.

– The share of institutional participants in the cryptocurrency market has increased. The big players hedged against inflation.

– The SEC has approved two bitcoin futures ETFs.

– The “London” update took place on the Ethereum network.

– The PayPal (NASDAQ:PYPL) payment system has added cryptocurrencies.

– El Salvador has recognized bitcoin as a means of payment.

– The Coinbase crypto exchange (NASDAQ:COIN) conducted an IPO by entering the Nasdaq exchange.

– Increased demand for NFT tokens.

– The head of the US Federal Reserve Jerome Powell said that the US will not ban cryptocurrency.

– Increased interest in Dogecoin and Shiba meme coins, as well as blockchain moments.

In 2021, the market capitalization has tripled — from $762 billion to $2.333 trillion. The cryptocurrency market has matured. Institutional investors will continue to come to the market, increasing its liquidity. The higher the liquidity, the less volatility and profitability.

Central bank meetings, decisions to combat inflation, the situation with the coronavirus, as well as geopolitical risks remain in the focus of attention of all markets.

The US Federal Reserve is rapidly winding down its quantitative stimulus program. The market begins to take into account the first rate increase in prices at the beginning of the first quarter of 2022. The dollar has every chance to remain a strong currency in the new year.

Inflation will not decrease quickly, and we should expect continued growth in the first half of 2022. In this regard, risky assets will have the opportunity to show growth until April.

The technical picture for bitcoin looks “bullish”, but alarm bells have already appeared for a correction to the level of $ 30 thousand. Crypto investors are also keeping an eye on the US stock market. Many expect the collapse of the technology sector.

There is a high positive correlation between bitcoin and American indices, so a drop in indices will bring down the cryptocurrency market. Saving their money on the stock market, investors will start selling cryptocurrency.

With a favorable external background for the crypto market for the first half of 2022, we can consider the target zone of $ 72-75 thousand per bitcoin.