Bitcoin Is Bringing A Record Year To A Close Yet ’22 Might Be Challenging

It is no secret that Bitcoin had a stellar 2021.  In fact, the year coming to a close was a record one for the cryptocurrency.  It is clear that ’21 marked the year of Bitcoin becoming the top mainstream cryptocurrency in the United States and most of the rest of the world.  Though China banned crypto mining this year, Bitcoin still fared well, rising to an all-time high of $64,400 in early November.  

Bitcoin has since slipped down to the $47,000 yet there is still plenty of hope for the future.  The question is whether Bitcoin holders and those looking to invest in the cryptocurrency will make a bundle of money with Bitcoin investments in ’22 or if it might be better to wait for ’23 to arrive.

An Uncertain Future Looms

Cryptocurrency experts and economists are struggling to predict what ’22 might have in store for Bitcoin.  There are rumblings that the United States federal government will put the clamp down on crypto, at least to a certain extent, with regulations.  Though it is technically illegal to use an alternative currency to the United States dollar (USD), Bitcoin holders and other crypto investors need not worry about the United States federal government putting the kibosh on crypto as occurred in China.  In fact, several members of Congress responsible for writing the language of the nation’s laws are also Bitcoin holders. 

The question is how deep crypto regulations will reach.  There is also a question of the rate at which crypto will be adopted by institutional investors as a digital asset.  Some question if Bitcoin and other cryptocurrencies will be seamlessly integrated into legacy financial systems in a year’s time or less.  

The moral of this story is there is no certainty in any investment securities of any type, be it Bitcoin, another form of crypto, a stock or an ETF.  Bitcoin is certainly volatile yet the same can be said of the stock market that has wildly fluctuated since the start of the pandemic.

Additional Bitcoin Hurdles of Note 

Aside from the potential for crypto regulation, there is also a chance that Bitcoin will encounter problems in ’21 in the form of additional competition.  Ethereum could easily take some of Bitcoin’s market share.  Former Twitter CEO and co-founder, Jack Dorsey, departed the platform to focus on facilitating the use of myriad crypto payments, meaning Bitcoin has more competition than some assume.  

All in all, Bitcoin is worth less than 50% of the overarching crypto market.  Bitcoin’s market value is $900 billion.  However, the entire crypto market as a whole is worth a whopping $2.36 trillion.

Will Bitcoin Evolve? 

There is also some industry-wide concern that Bitcoin will stagnate rather than evolve.  Bitcoin has been slow to enhance its design when juxtaposed with the likes of Ethereum.  If Bitcoin’s mysterious founder, Satoshi Nakamoto, rests on his or her laurels and the cryptocurrency does not prove to be a true innovator, it might not be widely revered as a futuristic economic foundation for stable global commerce across posterity. 

Bitcoin Holders Should Remain Optimistic  

Bitcoin is likely to overcome the hurdles detailed above as ’22 unfolds.  Those who hold Bitcoin are encouraged to reflect on the successes of the year gone by.  The cryptocurrency can now be used to purchase Tesla automobiles.  Professional athletes and celebrities such as Matt Damon are appearing in commercials and other advertisements touting the merits of crypto.  

Even the famous investing guru, Cathie Wood, of Ark Investments, has added crypto to her portfolio.  The ever-rising tide of the crypto industry has the potential to lift Bitcoin and other cryptocurrencies higher in ’22 and beyond.

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