Despite the fact that by the end of last year the cost of the main cryptocurrency sank, 2021 as a whole turned out to be successful for the crypto market. During this time, Bitcoin has grown by 64%. At the same time, in November, the coin set a historical maximum value at $69,000, and the capitalization of the entire sector for the first time exceeded $2 trillion. But does this mean that digital assets will continue to grow in value compared to fiat money this year? What dynamics to expect from the crypto market next year, Zineira specialists tell.

The capitalization of cryptocurrencies has been growing exponentially in recent years, and this is due to many factors. Many experts talk about instability, in particular, that the market is approaching a fall, and bitcoin will drop to $10,000 this year. Such a forecast is based on the fact that coins have no fundamental value. Despite this, fans of cryptocurrencies believe that the situation will turn out completely differently, and expect growth – no less than $100,000 per 1 bitcoin.

What factors influence the price of bitcoin in 2022?

Cryptocurrency is a promising way to earn money, being an ideal tool for saving, financing, and investing. Its fundamental value is formed by the equipment and electricity that are necessary for mining.

Also, a significant growth factor is a regulation of the crypto market in a number of countries, which helps to clear the sphere of scammers and protect the interests of its participants. In this regard, large institutional players with more significant investments entered the market in 2021, they are aimed at the long-term accumulation of digital assets.

These factors indicate that with the advent of more institutionals, the volatility of cryptocurrencies will decrease, and the scenario of Bitcoin falling to $10,000 is unlikely. But it is worth considering that the virtual asset market still depends on the rapid development of new technologies, changes in regulations and policies in the traditional financial sector, as well as the influence of large players.

How is global inflation affecting crypto?

Over the 13 years of its existence, bitcoin has not only acted as a hedge against inflation but has outperformed all stocks from the S&P500 index. Its popularity is largely due to the desire of investors to protect themselves from record inflation. Todd Lowenstein, the strategist at Union Bank, predicts that the Fed’s move to tighter monetary policy in 2022 will slow inflation and reduce liquidity, which could significantly reduce the attractiveness of the digital currency.

However, other experts believe that this aspect cannot reduce the popularity and popularization of cryptocurrency, since such a concept as inflation is not inherent in digital assets.

That is why most experts predict an unprecedented growth in the crypto market and the emergence of cryptocurrencies as the only point of stability in the world.

Now is the time to invest in cryptocurrency, Zineеra is sure.