The first half of 2022 has been very bad for the crypto market.
Bitcoin and ethereum are down more than 50% from their all-time highs in late 2021. While there have been small surges in recent weeks, the crypto market as a whole is largely stalled. While no one knows for sure, some experts say crypto prices could fall even further before any sustained recovery.
Bitcoin hit multiple new all-time high prices in 2021 — followed by big drops — and more institutional buy-in from major companies. Ethereum, the second-biggest cryptocurrency, notched its own new all-time high late last year as well, and then crashed below $900 in June, its lowest level since the start of 2021. U.S. government officials and the Biden administration have increasingly expressed interest in new regulations for cryptocurrency.
All the while, people’s interest in crypto remains high: it’s a hot topic not only among investors but in popular culture too, thanks to everyone from long-standing investors like Elon Musk to that kid from your high school on Facebook.
In many ways, 2021 was a “breakthrough,” says Dave Abner, head of global development at Gemini, a popular cryptocurrency exchange. “There’s tremendous focus and attention being paid to [the crypto industry].”
Ethereum’s Future Outlook
Ethereum is the second largest cryptocurrency and most well-known altcoin in the market. Like bitcoin, it can also serve as a good measure of the crypto market. In the last six years, it has grown immensely in value — from $0.311 at its 2015 launch to around $4,800 at its highest late last year.
While it’s a ways away from its all-time high, ethereum’s price has the potential to climb tremendously for the remainder of 2022.
Experts say that number could depend on the success of ethereum’s massive upgrade, which is set for Sept. 19. Ethereum is transitioning its technology to a less energy-intensive version that insiders colloquially refer to as “The Merge.” The upgrade also promises to make the network more efficient, faster, and cheaper to use.
If ethereum lives up to its promises with the merge, experts say ether could once again break $4,000 in 2022 and even possibly go as high as $12,000. Investors are closely watching every step leading up to the merge and in some cases taking advantage of the current market downturn by buying the dip ahead of it. Only time will tell if ethereum’s price will continue to climb or fall back down to previous lows, according to experts.
“This is going to be a very important year for ethereum, a kind of a make-or-break year.”said Henri Arslanian, global crypto leader of the professional services firm PwC.”
Bitcoin’s Future Outlook
Bitcoin is a good indicator of the crypto market in general, because it’s the largest cryptocurrency by market cap and the rest of the market tends to follow its trends.
Bitcoin’s price had a wild ride in 2021, and last November set another new all-time high price when it went over $68,000. But then it came crashing down in 2022.
Bitcoin and the broader crypto market have been sinking this year amid ongoing macroeconomic uncertainty that’s mostly been driven by surging inflation, a shaky stock market, rising interest rates, and recession fears. Bitcoin has lost more than two-thirds of its value since last November, and dipped as low as $17,500 in recent weeks. Experts remain conflicted on whether bitcoin has bottomed out yet. Some say it already has, while others says bitcoin could fall as low as $10,000 in 2022.
This volatility is a big part of why experts recommend keeping your crypto investments to less than 5% of your portfolio to begin with.
But how high will bitcoin go in the long term? While it’s been a rocky start to the year for bitcoin, but experts still say it will hit $100,000 — and that it’s more a matter of when, not if. Bitcoin’s past may provide some clues as to what to expect looking forward, according to Kiana Danial, author of “Cryptocurrency Investing for Dummies.”
Danial says there have been plenty of huge spikes followed by pullbacks in Bitcoin’s price since 2011. “What I expect from Bitcoin is volatility short-term and growth long-term.”
