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The journey of Cryptocurrency from 2017-2022 and what the future holds: PART 4

PART 4:

2022: The Future of Cryptocurrency

 

What we have seen so far in 2022

 

Entering 2022 and the month of January saw a highly volatile market, continuing the negative trend line, with many of the top cryptocurrencies losing a lot of value. BTC began the year with a $900 billion market capitalisation and a price of $47,600, having been down 5.4% in the week, ETH was at $448 billion market cap with a price of $3,770, down 8% in in early January and Binance Coin (BNB) which was now the ranked 3rd with a market capitalisation of $88 billion, was priced at $527, down 3.7% for that 7 day period. This downtrend continued for much of January until a slight bounce towards the end of the month, with BTC reaching as low as $33,500, ETH reaching as low as $2,200 and BNB as low as $342. 

 

Why was this happening?

 

It was off the back of all-time highs in early November. As mentioned in Part 2, BTC and ETH had all-time highs of $69,000 and $4800 respectively, representing the top of the market in this cycle. 

 

There were a few fundamental reasons as to why the market had a large dip. On the 21st of January, we saw the price of BTC fall from $43,300 to $34,600 in a single day, with most cryptocurrencies following, causing a $350 billion market capitalisation wipe out. 

 

On January 24th, China passed legislation to shut down all Bitcoin mining in the Sichuan province as well as making all cryptocurrency transactions illegal. This led to a huge dip in the market, with the leading cryptocurrencies of BTC, ETH and BNB taking dips of -6.33%, -12.2% and -10.10% respectively. 

 

Moreover, there has been increased regulatory involvement by the U.S. government, with new legislation pertaining to cryptocurrency in the latest infrastructure bill. With the cryptocurrency market still being relatively “new”, any form of fundamental news such as tightened regulation can cause great volatility. This was evident in both the China & US cases. 

 

There is also a widespread belief that the cryptocurrency market now falls in sync with the stock market to a degree. Prior to Covid-19 sweeping the globe and its associated markets, Bitcoin and Ethereum in particular rarely followed major stock indices. Throughout their infant years, they were actually perceived as a hedge against volatility in other asset classes. There was no indication that BTC and ETH, or any cryptocurrencies, followed the S&P 500 throughout the bull run of 2017, and subsequent bear market throughout 2018-2019, with the correlation coefficient as low as 0.01, before rising to as high as 0.36 for the 2020-2021 years. 

 

This has most definitely changed since the start of the pandemic, with both stock prices and cryptocurrency prices surging due to greater risk appetite for investors, easier global financial conditions, increased government support and the stay at home factor. See below the stronger movement in correlation:

 

 

The increase in the correlation between Bitcoin’s volatility and decline, and the S&P 500 throughout the pandemic, was evident in the fact that Bitcoin’s volatility explained roughly 1/6th of the S&Ps volatility during the pandemic, and conversely, the S&P’s volatility and decline on average was of a similar magnitude. This suggests that there was clearly the possibility of spillover of investor sentiment transferring from one market to the other, especially since 2017-2019.

 

 

 

Additionally, it is clear that slumping prices continue to be influenced by a continuing poor release of job reports, surging inflation and signs from not only the Fed, but globally that pandemic financial help measures will begin to cease (including in Australia). We have already seen this with the removal of JobKeeper and JobSeeker. There are continued conversations surrounding the economic uncertainty over Omicron (covid-19 variant), with ongoing comments from multiple governments surrounding the impact of it on the economy. 

 

However, in recent weeks in 2022, we have seen the market recover nicely, with the entire cryptocurrency market pushing past a total capitalisation of $2 trillion once again. BTC has seemingly stabilised, rebounding to its highest price in 2.5 weeks, being the threshold of $40,000 on February 4th, pulling the rest of the market with it. There is no clear, set-in-stone reason as to why BTC is bouncing nicely, however, in recent days we have seen increased institutional investment with KPMG declaring BTC is on their balance sheet, as well as Tesla increasing their holdings. Additionally, a US Senator declared they have bought BTC, an Arizona Senator wants to make Bitcoin legal tender, and Nasdaq has approved Bitcoin Miners ETF. 

 

The expectations of deFi

 

At the start of January, deFi had a total value locked of $100 billion on Ethereum alone, and towards the end of 2021 there was a total of $231.85 billion in total value locked in the deFi ecosystem. This will continue to grow throughout 2022 as substantial investment continues to pour into the space, as finance angles towards alternative protocols, scaling and infrastructure solutions. As deFi continues to become adopted by the mainstream, it is inevitable that in 2022 we will see increased layer 2 scaling, interoperability, further regulation and institutional investing. With financial innovation at the forefront of decentralised finance, we will only see more radical investment returns and opportunity. 

 

 

2022 shapes up to be a huge year for progress in the offering of deFi products on exchanges. Recently we have seen Coinbase offer yield on certain stablecoins to users, offering access globally to millions of people. With many cryptocurrencies now moving to a proof-of-stake consensus mechanism, more and more users can now earn rewards for simply contributing to the security of the network, by staking and locking some of their holders into a staking pool. On Coinbase, users can now stake coins such as ETH, ATOM and Tezos and can earn APY of as much as 5% (depending on the type of asset staked). Binance has also begun offering earning opportunities and staking capabilities, with their Binance Earn platform at the start of 2022. This extends to their “Happy New Year Staking” promotion where users can earn up to 35.67% APY with their staking, allowing users to stake AVAX, SOL, ADA, NEAR and Luna. With central exchanges such as Coinbase and Binance (being two of the largest), now offering yield farming and staking capabilities for their users going into 2022, we can only expect decentralised finance to keep striving with these platforms, showcasing projects and providing an increased audience of users with related services and passive income earning methods. 

 

As mentioned in 2021, decentralised exchanges have grown exponentially in use and trading volume, which in turn will increase the number of investors seeking profitable passive investments options. UniSwap should remain the king of all deFi exchanges, with a current locked value of $7.8 billion. Being built on the Ethereum network, users can become liquidity providers, in which they earn liquidity provider tokens for the corresponding pool they provide liquidity for, and a small percentage of the transaction fees on the trading pair. Moreover, users can engage in UniSwap’s staking process, earning passive income on the Ethereum network. This extends to Pancake Swap, in which users can earn CAKE when providing liquidity. Once again, users can farm CAKE when providing liquidity in the individual liquidity pools, earning CAKE by providing liquidity pairs. 

 

The growth of individual, smaller, decentralised finance projects that are offering very lucrative passive income earning opportunities, is also starting to gain momentum. The current landscape has allowed for new blockchain technologies to offer their own ways of farming and staking. The Drip Network is a great example of this. The official token of the Drip Network being DRIP, a BEP-20 token developed on the Binance Smart Blockchain (BSC). It captures value by being scarce, deflationary, censorship resistant, and by being built on a robust, truly decentralised blockchain. DRIP offers both “The Faucet” and “The Reservoir” as two different passive income-earning opportunities, as well as their new Manor Farm and its second layer The Animal Farm are unlike any project that exists today. It presents an opportunity for “farmers” and stakers to work together to promote and grow the platform, as well as substantially benefit DRIP holders by adding liquidity to the DRIP network. Another example is Multi Chain Capital (MCC). Users buy MCC on Ethereum or Binance Smart Chain, which is then farmed on multiple chains with profits returned to holders. 

 

Ethereum is expected to remain the king of deFi, with hopes that it will finally complete the transition to the proof-of-stake consensus mechanism (Ethereum 2.0). With Ethereum 2.0 in place, transaction fees should be dramatically reduced, thus only increasing the likelihood that Ethereum will remain as the go-to place for using decentralised finance applications and platforms. With Ethereum 2.0 on the horizon, technologists Thomson Reuters and Joseph Racyznski stated “scalability and throughput are king, but doing this in a decentralised manner with security is critical – proof-of-stake on Ethereum in 2022 should get them there”, going on to assert that Ethereum’s price will climb to $8,000 by the end of 2022 and soar to $15,000 by the end of 2025. CoinSmart chief executive Justin Hartzman also stated “if the Ethereum 2.0 model is successful and proof-of-stake is properly implemented, we can expect Ethereum to moon real hard”. It is important to note that almost everything that is innovative in the decentralised finance world right now that is occurring, is happening within the Ethereum ecosystem. With deFi, DAOs and NFTs continuing to increasingly grow throughout 2022, Ethereum will remain the go-to blockchain for decentralised finance. It is known that in the history of technology ecosystems that once an industry or market enters the mass adoption phase, it’s incredibly tough to dislodge any of the early pioneers, which Ethereum is. 

 

Web 3.0 & The Metaverse

 

As Web 3.0 and the Metaverse started to build serious momentum across 2021, it’s hard to imagine that in 2022 and beyond this momentum will slow. Whilst still in their infant stages, given the interactive nature of blockchain technology and its use in the Metaverse, it is expected that the virtual reality world will continue to grow. Some analysts, including leading cryptocurrency entrepreneur O.J. Jordan is predicting that the market can grow from its current $70 billion dollar market value to over $800 billion in the next 2 years. 

 

Web 3.0 will continue to deliver a decentralised internet infrastructure through the use of blockchain technology. As the world is beginning to have less trust in central intermediaries such as big tech networks, governments and IT service providers due to their non-transparent handling of collected data, we will see more and more individuals begin to shift to Web 3.0 and blockchain technology. Users of the internet will have increased control over their own data and the infrastructure used. With increased adoption through the introduction of mobile apps and increased funding, 2022 is going to feature a lot more venture capital not only into cryptocurrency, but the Web 3.0 space. Web 3.0 has the potential to combine NFTs, gaming, deFi and decentralised autonomous organisations (DAOs), allowing them to interact seamlessly, hence it has potential and room to continue to expand throughout 2022 and beyond. 

 

However, mass adoption of Web 3.0 and associated blockchain solutions may be years, even decades away, as social media platforms such as Snapchat, Facebook and Tik Tok still provide content creators and users with the ability to mint their content and subsequently sell it (such as in NFTs). Additionally, as Web 3.0 adoption is tied to the blockchain and cryptocurrency markets, it is still susceptible to the challenges and obstacles that face the market yearly, such as regulation and volatility. An example of this is the increased regulation from China and the US in early to mid January which caused widespread FUD and negative fundamental impacts on the market as a whole. If the market was to crash, what’s to say this won’t hinder the continued growth of a decentralised web? 

 

Moreover, there is still a lack of interoperability standards between blockchains. If Web 3.0 is to be adopted by the masses and become far more mainstream, the interoperability of the various blockchains could prove to be a huge obstacle in the deployment of Web 3.0 as a viable solution. There is increased difficulty of current blockchain technology for the standard person to be able to, for instance, mint and then sell their own NFT. Considering a majority of NFTs are also centred around the current Ethereum network, the average user may be inclined to reject such high gas fees and slow transactions. Irrespective, these digital economies have represented a turning point for blockchain-based infrastructures and will continue to expand throughout 2022 and beyond. 

 

As mentioned, the Metaverse is garnering a heap of support from institutions as large as Facebook (Meta) and Microsoft. Facebook has continued its commitment to the Metaverse in 2022, with Zuckerberg proclaiming that the metaverse will ultimately become the successor to the current mobile internet. It’s expected that Meta will make their main focus the provision of a digital network in which users can socialise through virtual reality, where hardware and software will combine in the future to make this focus a reality. Meta has already gone on to introduce the AI Research Supercluster (RSC), which will be one of the fastest supercomputers running in the globe once built in mid-2022. Ultimately, the RSC will “pave the way toward building technology for the next major computing platform – the Metaverse, where AI-driven applications and products will play an important role”. It is this concept of creating a digital world in which users can interact, whether that be through working means or the way a user’s leisure time is spent. It also increasingly opens up opportunities in the business world for those companies looking to monetise digital assets, or for users seeking real-life usage throughout the Metaverse. This can only benefit the cryptocurrency and blockchain space. 

 

In the days following Facebook’s announcement of its rebranding to Meta, Microsoft announced that users of its now popular “Teams” online meetings application would now be able to embed themselves into their own virtual avatar. Then, in January of 2022, Microsoft announced their decision to acquire Activision Blizzard Inc., a leader in content, interactive entertainment and game development. The Microsoft News Centre described the acquisition as a means of accelerating “the growth in Microsoft’s gaming business across mobile, PC, console and cloud and will provide building blocks for the metaverse”. Satya Nadella, the chairman and CEO of Microsoft, went on to say “gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms… we’re investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all”. 

 

 

The continued gamification of the industry

 

The gamification of the blockchain industry is closely linked to the growth of Web 3.0 and the Metaverse. The evolution of both Web 3.0 and the Metaverse to the mainstream will provide much needed growth, paving the way for large, alternative online games in which users can utilise these as earning opportunities, or alternatively, played for their intrigue and infused adrenaline. As mentioned above, we are already seeing Microsoft leading the way in declaring they are seeking a gaming world that will pave the way for the building blocks of the Metaverse. Additional major gaming companies Ubisoft (the creator of Assassin’s Creed) and Square Enix (the creator of Final Fantasy), have declared they have announced new Web 3.0 capabilities. Ubisoft has announced NFTs and a cryptocurrency-based payment system, whilst Square Enix announced 2021 to be the “metaverse year”, with much expected growth of the emerging sector in 2022. 

 

The expected usage of NFTs and cryptocurrency economies in gaming will continue to expand in 2022. The marriage between cryptocurrency, blockchain and gaming has led to users now dubbing this industry as ‘GameFi’, the combination of both gaming and decentralised finance. GameFi will allow gamers to take advantage of combining both digital assets and gaming through their computers and an internet connection, regardless of where they are located throughout the globe. 

 

NFTs being utilised as in-game items within online games will only grow. They can offer a variety of functions, such as proof of ownership for in-game items, providing numerous benefits to users whilst enabling a better experience of the games. As CryptoKitties was a breakthrough in the world of blockchain gaming, we are seeing more and more popular games follow suit whereby players can acquire in-game items, such as cats, and have the ability to develop them and exchange them for cryptocurrencies. This has also provided a means for “play-to-earn” modelled games, in which players play certain games and earn rewards in the form of cryptocurrencies or NFTs. Popular online play-to-earn games can be found here.

 

GameFi is a step in the right direction in bridging the gap between the cryptocurrency world and traditional markets. CoinFantasy is a prime example of a decentralised gaming platform for cryptocurrency markets with a play-to-earn model that bridges the gap between gaming and financial markets. CoinFantasy allows users to compete against the house to earn, level, and educate themselves on more about the CoinFantasy platform. In engaging with the platform, those users can also collect APY rewards from the reward pool and even stake funds and earn passive income on their favourite players. Furthermore, this gamification through blockchain technology means users can also level up and mine NFTs that provide custom avatars, categories, specific ecosystems, bonus rewards and levels. NFTs will become a huge part of the gamification of the cryptocurrency space. 

 

The future of NFTs

 

In 2021, we saw unforeseen growth in the NFT space, taking the world by storm. There is growing confidence globally that NFTs bring value to a number of industries, including the ones mentioned above such as the Metaverse and Gaming industries.There is also a growing belief that they will become useful in areas such as real estate, healthcare, and insurance. 

 

A Real-World Asset NFT (RWANFT) is a token that denotes virtual ownership of physical goods. While similar to established NFTs, these tokens are backed by an underlying physical asset, complete with warranties, insurance, and legal enforceability, to create trust in trade. Per the RWANFT website, an example of a RWANFT is an asset passport, being a digital identity for an object in the form of a unique contractual container (legal smart contracts) that records and manages the rights, obligations, and claims associated with a given asset (i.e. paperwork), all the while securing provenance. 

 

Another example is real estate, with traditional real estate being riddled with layers of intermediaries and third parties such as solicitors, real estate agencies and banks. Blockchain and decentralised finance has the ability to speed up the transaction process between two parties by replacing these third parties with smart contracts that allow for the faster, cheaper transfer of ownership. NFTs can be used in this sense to enable fractional property ownership, allowing the transfer of property or allowing owners to unlock value from previously illiquid assets and raise financing without having to go to a bank. 

 

Off the back of 2021, it’s also clear that NFTs will continue to become a part of our everyday lives when consuming certain content such as music and videos. The Block recently reported that “popular music festival Coachella has recently partnered with crypto exchange FTX US to launch an NFT collection. The NFTs, called Coachella Collectibles, will give consumers the opportunity to unlock festival passes, art prints, photo books, digital collectibles, unique real-life experiences at the festival and physical merchandise”. Similarly, “virtual commemorative tickets in the form of NFTs” were issued to those fans that attended Super Bowl LVI. 

 

The Australian Open also teamed up with NFT and Digital Collectible platform Sweet.io to release a “AO Decades Collection, featuring six commemorate NFT collections celebrating the iconic decades of the AO”, providing tennis fans and collectors an opportunity to acquire a piece of AO history. Per the Australian Open website, the AO’s launch into the Metaverse and the realm of digital tech reinforces the Australian Open’s reputation as one of the most innovative sports and entertainment events in the world. This includes their release of only 6,776 AO Art Ball NFTs that were minted. Craig Tiley, director of the Australian Open said “combining real-time court data with NFTs has never been attempted before and will provide incredible ways for global tennis fans to engage as NFT holders in the AO.”

 

 

With these real-life use cases increasing by the month, it is clear that NFTs are here to stay. In January of 2022, NFT sales volumes actually set all-time records. Some of the largest cryptocurrency exchanges such as Binance, Coinbase and ByBit are now starting to launch or announce plans around NFT marketplaces. With increased exposure through these exchanges, increased volume will only attract more players. Furthermore, these exchanges will offer fiat on-ramps, making it simpler for people new to cryptocurrency to make purchases of NFTs, e.g. through Mastercard. Although the NFT industry is quite speculative in nature, mirroring the early infant years of cryptocurrency when blockchain technology was not yet fully developed, for 2022 and beyond, once the technology continues to develop and real-life use cases become adopted, NFTs as an industry will continue to grow.   

 

Will mining and cryptocurrency become more sustainable?

 

We are seeing movement in the right direction for sustainable mining. Bitcoin Mining is said to be responsible for approximately 137 terawatt hours of energy consumption per year according to latest data from the Cambridge Bitcoin Electricity Consumption Index. According to Digiconomist, Ethereum produces more than 47 million tonnes of carbon dioxide emissions annually. 

 

Recently, leading tech giant Intel, one of the largest computer processor manufacturers, announced the release of their new specialised “ultra-low-voltage energy-efficient Bitcoin mining ASIC” known as the “Bonanza Mine”. Although Intel are yet to state anything publicly, Tom’s Hardware reporters noticed that they are seeking to present the “Bonanza Mine” processor at the upcoming IEEE International Solid-State Circuits Conference (ISSCC) in February 2022. Intel is scheduled to present in the Highlighted Chip Releases category, with the purpose of showing off this new energy-efficient miner off the back of its submitted patent in November 2018, in which they detailed “high-performance Bitcoin Mining” processing chips. Could we see Intel produce ASICs that improve afforded efficiency and performance advantages over other ASICs, CPUs, and CPUs, all the whilst decreasing environmental impact? We will soon find out. Some reports are suggesting that the Bonanza Mine system could potentially reduce overall power consumption by approximately 15%, however the actual figures are not yet known. 

 

There is also an increasing number of sustainable cryptocurrencies coming onto the market. With more and more proof-of-stake cryptocurrencies coming into play and replacing out-of-date proof-of-work consensus’ which require large amounts of energy to perform the computations associated with cryptocurrency mining, we are gradually seeing a shift towards a more sustainable mining environment. Proof-of-stake consensus saves a large quantity of energy as participants buy tokens to join the network, rather than mine. The founder of Cardano (a proof-of-stake consensus) claims that the network only consumes 6 GWh of power. 

 

SolarCoin (SLR) is a cryptocurrency that can be spent and traded just like other cryptocurrency tokens, with the key difference being that it incentivises a solar-powered planet, as solar energy is now the cheapest fuel in over 150 countries. SLR aims to make it free. 

 

Powerledger (POWR) is a longstanding Ethereum token established in 2016 that powers the Powerledger platform. POWR has developed an energy and flexibility trading platform that allows households, organisations and the grid itself to trade with each other. They have currently over 30+ clients and operate in 11 countries worldwide. POWR was as low as $0.10 throughout the middle of 2021, but investors’ faith in the environmentally sustainable technology has actually allowed POWR to against the recent negative trend in the market and as of writing is now trading as high as $0.56. 

 

Regulation in deFi and the wider cryptocurrency market in 2022

 

Regulation in 2022 will also prove to be of great importance in the adoption of deFi. It plays a fundamental role in institutional adoption. In order for the adoption to take place, deFi infrastructure is required to be built for investment firms and those larger regulated institutions to dive in. Over the last 12 months, we have seen a large increase in capital flow into the space in order to build the necessary infrastructure. 

 

It is expected that with increased regulation, regulated cryptocurrency funds, hedge funds, and traditional fund managers will lead the way in increasing adoption globally. While it seems relatively chaotic at the moment, increased regulatory focus on stablecoins and deFi platforms would provide very positive changes that are needed in the year ahead and play a fundamental role in institutional adoption cycles. The larger and more regulated entities have more regulatory monitoring, oversight, reporting and compliance they need to adhere to. For these types of investment firms to lead the adoption of decentralised finance, the required regulatory framework and infrastructure will have to be built and this is exactly where the market finds itself right now. With increased introduction of institution-based, decentralised finance infrastructure, products and services, along with the surging usage of both Bitcoin and institutional blockchain use, it suggests that mass institutional adoption of deFi is imminent.

 

Regulators are also reacting to the rapid expansion of the broader cryptocurrency market, with increased scrutiny being placed on exchanges incorporating surveillance into their infrastructure to ensure market integrity. With cryptocurrencies maturing and being adopted more in the mainstream, we will see new technology-based surveillance programs that have sophisticated cryptocurrency-specific pattern detection capabilities to prevent major spikes in volatility. In the long run, for 2022 and beyond, the cryptocurrency exchanges and participants within the industry that protect their marketplaces and associated users, will inspire confidence within the public and therefore emerge as market leaders. 

 

Potential downfalls of 2022

 

The current market state is still a grey area. The market as a whole has been in a period of a downtrend, with minor bounces, potentially being fake-outs. It’s important that investors are aware of a potential crash due to high inflation globally, creating an extreme demand and low supply scenario. If U.S. interest rates are to go up as a result, then the entire cryptocurrency and high risk markets could potentially further dip. 

 

With the current growth of cryptocurrency, it is also expected that most governments will continue to provide harsh oversight over cryptocurrency so that it does not become anything more than an investor’s dalliance. Governments do not want to lose power to cryptocurrencies in both the short and long term, particularly in the areas of tax avoidance, money laundering and illicit transactions. The infrastructure bill mentioned previously is an example of new reporting requirements introduced by the U.S. government for certain cryptocurrency transactions. Regulatory framework is needed for the further advancement of blockchain technologies and cryptocurrency in 2022 and beyond, however, investors should be wary that government involvement is only expected to increase. 

 

Pulling it all together: Market cycles and halving

 

Currently, BTC has bounced back to $44k, up 15% over the last week, presenting investors with the bullish view that if BTC can break the negative trend line and avoid being a fake-out to break through $44k to $47k and beyond, we could see a very nice bull run. As mentioned though, the market is currently in a grey area with a trend not entirely clear.

 

Across the next few years, readers should be reminded that they should conceptualise Bitcoin by grouping halving periods. In these periods, a halving occurs, cutting the rate in half at which new Bitcoins are released into circulation. This enforces synthetic price inflation until all BTCs are released. An illustration of the historic price movements after halvings of BTC is illustrated below:

 

 

In the past, Bitcoin halvings have correlated with huge increases in Bitcoin’s price. Per Investopedia, the first halving, which occurred on Nov. 28, 2012, saw an increase from $12 to $1,217 on Nov. 28, 2013. The second Bitcoin halving occurred on July 9, 2016. The price at that halving was $647, and by Dec. 17, 2017, Bitcoin’s price had soared to $19,800. The price then fell over the course of a year from this peak down to $3,276 on Dec. 17, 2018, a price 506% higher than its pre-halving price. The most recent halving occurred on May 11, 2020. On that date, Bitcoin’s price was $8,787. On April 14, 2021, bitcoin’s price soared to $64,507 (an astonishing 634% increase from its pre-halving price). A month later, on May 11, 2021, Bitcoin’s price was $54,276, representing a 517% increase that seems more consistent with the behaviour of the 2016 halving. 

 

As new Bitcoin is mined roughly every 10 minutes, the next halving of Bitcoin is going to occur sometime in the earlier months of 2024. As a result, the current reward rate of 6.25 will drop to 3.125. Given these directions of prior halvings, most investors believe the value of BTC will increase once again to new highs in early 2024. It is usually these halving dates that define the start and the end of the Bitcoin price action cycle. As is implied, the supply of new Bitcoin is reduced by 50%, causing the market to usually go on parabolic runs. It is important for all cryptocurrency investors to understand where the market stands in the halving cycles, as it allows for a greater perception of where the bulls and busts of the market will be. 

 

As of right now, we are coming into the middle phase of the halving cycle. Here, this tells us we should see the top of the market very soon. Some expert predictions have put BTC as high as $120–150k by the peak of this cycle. Whilst the immediate future is unclear, the long term growth of cryptocurrency and blockchain technology is very positive. With decentralised finance growth, movements towards Web 3.0 and the Metaverse, real-life usage of NFTs, the cryptocurrency and blockchain space has much more room to grow. Irrespective of the current market state, we have much more as cryptocurrency enthusiasts to look forward to in 2022 and beyond.

 

Good luck & remember to always HODL!

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