when crypto market will go up? Two primary factors can influence the price of crypto assets: political uncertainty and the ban on crypto-related services in China. Ultimately, we’ll see that the cost of Bitcoin is unlikely to drop below $10,000 before the end of 2022. In the meantime, political uncertainty is a critical factor in determining the price of Ether.
Bitcoin price will tank to $10,000 in 2022
If you’re a crypto investor, it’s an excellent time to get in before it’s too late. According to a professor of finance at Sussex University, Carol Alexander, Bitcoin will tank to $10,000 by 2022. While most experts still see the bitcoin price rising, the bearish sentiment is diminishing as the years go by. There’s a good chance that Bitcoin will tank further, but only if it reaches $100k per coin.
Cryptocurrencies are vulnerable to a crypto winter, a period in which prices crash sharply for months or years. In 2022, the Federal Reserve could start raising interest rates, further denting the appeal of cryptos. But the Fed’s policymakers have made it clear that they are keeping an open mind toward the cryptocurrency, so it’s still worth buying in. In the meantime, crypto investors can take comfort in the fact that there’s a big market for digital currency.
Some experts aren’t convinced that the crypto party will be over by 2022. They point to the emergence of Ethereum as a competitor to bitcoin. However, the most significant risk to 2022 is the Fed’s quantitative tapering, which has already been priced in. According to Jurrien Timmer, head of full worldwide scale at Fidelity Investments, the Bitcoin price may reach $10,000 by 2022.
In this article, we’ll talk about the importance of Global Economic Policy Uncertainty and its influence on Bitcoin returns, volatility, and volume. We’ll also summarize the variables’ statistics and examine the results of OLS and Transfer Entropy estimations. Whether or not this uncertainty affects the cryptocurrency market will depend on how much attention investors and media platforms give to it.
Assuming that the US economy is not experiencing stagnant growth, the current sell-off may be related to high inflation rates. US inflation topped 7% in December 2021, the highest level since 1982. Meanwhile, the Federal Reserve plans to raise interest rates three times in 2022. While many people are worried about the potential impact of these rate hikes on crypto prices, the central bank has had a hard time deciding if it should raise interest rates.
While most currencies are dependent on macro-determinants, these currencies can transmit economic uncertainty to Bitcoin. To calculate this, you can use the GEPU proxy, which asserts the absolute value of global Economic Policy Uncertainty. The GPU proxy uses monthly data of GDP-weighted averages of each nation’s EPU. The GPU proxy also includes other macro-economic factors that may influence Bitcoin’s price.
China’s ban on crypto-related services affects the price of Ether.
In addition to the repercussions on the price of Ether in China, the ban also affected the tokens associated with OKEx and Huobi. After the crackdown, these tokens plunged by over 20%. Huobi and OKEx did not immediately respond to requests for comment. Crypto enthusiasts in China have been scurrying to lock in their assets. As crypto’s market cap has stabilized across the rest of the world, the crackdown in China has done just that.
The People’s Bank of China has banned all virtual currency transactions, warning against the risks of unofficial digital money and threatening the safety of people’s assets. Given that China is the world’s largest cryptocurrency market, the news of the ban hit the cryptocurrency markets globally. Bitcoin, for example, fell more than $2,000 in morning trade versus $44,000 a day earlier. Chinese regulators have previously banned payment and financial institutions from providing services related to cryptocurrencies, despite the potential for abuse.
The ban does not just apply to buying and selling virtual currencies but to providing information on them. Providing this information could lead to prosecution and investigation. The Chinese government hopes to combine offline and online studies to crack down on this illegal activity. As a result, the price of Bitcoin and Ether could decline for a while, but the future of these cryptocurrencies is still bright.