In the grand scheme of things, bitcoin has had a pretty nice year. Since the beginning of 2021, the digital currency has increased by about 70%, bringing the total worth of the crypto market to $2 trillion.
It’s been a year marked by the emergence of the first big crypto business, Coinbase, in April, growing participation from Wall Street banks like Goldman Sachs, and the approval of the first bitcoin exchange-traded fund in the United States.
With next year already looking like another roller-coaster period for digital currencies, CNBC takes a look at analysts’ biggest predictions.
Some experts believe bitcoin is due for a sharp decline in the coming months.
The cryptocurrency surged to a record high of almost $69,000 in November. It’s now sitting below $50,000, down almost 30% from its peak. Wall Street wisdom defines bear markets as a decline of 20% or more from recent highs, but it’s worth noting bitcoin is notorious for its volatility.
Carol Alexander, professor of finance at Sussex University, said she expects bitcoin to tank to as low as $10,000 in 2022, virtually wiping out all of its gains in the past year and a half.
“If I were an investor now I would think about coming out of bitcoin soon because its price will probably crash next year,” Alexander said. Her bearish call hinges on the notion that bitcoin “has no fundamental value” and serves as more of a “toy” than an investment.