Bitcoin Halving Impact Fades as Demand Takes Center Stage
According to reports, the Open Interest in Bitcoin is now 30 times higher than it was 11 days before the 2020 Bitcoin halving.
As the year comes to a close, Bitcoin price has tagged all-time highs and found stability 66.8% more than the price it wrapped up in 2020 with.
The leading cryptocurrency might be showing choppy price action over the last month, but Bitcoin has managed to maintain its health just below $48,000 USD. In November, Bitcoin soared to reach nearly $70, 000 USD before dropping down to just below $47,000 USD. While it hasn’t regained back since the dip six weeks ago, Bitcoin price might be set to surge again in the new year. Following the typical festive sell-off and investors cashing out ahead of tax season, the first quarter of 2022 has the potential to see Bitcoin reach once more for unprecedented values.
This will happen if it can hold above the $47,000 USD mark. As Michaël van de Poppe noted, Bitcoin is in the process of bottoming out as it tests and retests support and resistance barriers.
Pretty boring markets lately. Just a process of bottoming out for #Bitcoin.
We’re retesting $46K as support, bounced, but we might need to take the liquidity beneath the lows before we’re going to make some upwards runs again.
— Michaël van de Poppe (@CryptoMichNL) December 30, 2021
Investors and experts remain bullish for Bitcoin’s long-term future but suggest that Bitcoin might not have found its bottom just yet. Paycer UG founder & CTO Nils Gregersen predicts that Bitcoin has a massive price in sight in the next few years but will fall from its current value before we see it:
“Bitcoin will reach at least $200,000 by 2025. But I am pretty sure we will see it fall to around $20,000 before hand.”
The cryptocurrency market overall
According to Gregersen, the leading tokens in the market will survive, but altcoins that don’t have a solid use-case or functionality will die out as the market becomes more cemented and stable. He said:
“I think in 2022 we are going to see a little cooldown in the market. Only the stronger projects will survive. For the memecoins and other shady projects, I think the air gets a little thinner for them.”
However, as decentralised finance (DeFi) and non-fungible tokens (NFTs) explode in popularity, there remains a great deal of potential for new projects in the next year. Sven Wenzel, the co-founder of digital art platform Castello Coin, predicted that the metaverse scope is set to yield the same attention and potential as cryptocurrency and early adopters will benefit greatly from it, noting:
“Getting aboard the metaverse train today with all the connections to other aspects of blockchain evolution will be synonymous to getting aboard the Bitcoin train in its earliest days. An early investment in a metaverse token can amount to so much more in the longer term.”
More institutions and big-brand names are entering the scene of decentralised finance. Leading financial companies like Deloitte, Visa and Mastercard have taken a step to explore the space. Ava Labs president John Wu estimates that more traditional finance companies will start to involve themselves more actively in DeFi over 2022 and that new projects will be worth watching.
“Look at the list of major media companies, sports leagues or content creators participating in digital assets at the start of the year versus the end of it. I think you will see enterprise blockchain pilots move into the live stages a lot quicker than people expect.”
As DeFi, NFTs and other cryptocurrencies see more attention, the blockchain-based asset industry overall will see more investors come in. 2022 might just be the year that things surge, stabilize more, and get sent to the moon.