Goldman Sachs has suggested that Bitcoin could reach a milestone value of $100,000 this year as it continues to take market share from gold. Analysts at the Wall Street bank estimate that Bitcoin’s market capitalisation is just under $700billion. The bank added that while Bitcoin’s consumption of natural resources may be a barrier to institutional adoption, this wouldn’t hurt demand for the asset. Bitcoin is currently trading at around $46,000 having hit a new high of $69,000 last year. IC15, India’s First Cryptocurrency Index, Launched by CryptoWire; Here’s Everything You Need to Know
However, heightened scrutiny by regulatory bodies and price fluctuations have dampened bitcoin’s prospects lately. And experts warn the market could be heading toward a downturn.
With next year already looking like another roller-coaster period for digital currencies while some are optimistic about the prospects of crypto, others are more sceptical.
According to Carol Alexander who is a professor of finance at Sussex University, Bitcoin will “probably crash” in 2022.
In her interview to CNBC last month she said, “If I were an investor now I would think about coming out of bitcoin soon because its price will probably crash next year.”
Professor Alexander added that Bitcoin “has no fundamental value” and serves as more of a “toy” than an investment.
Alexander warned of history repeating itself. In 2018, bitcoin tumbled close to $3,000 after climbing to a high of nearly $20,000 a few months earlier. The cryptocurrency’s backers often say that things are different this time, as more institutional investors are jumping into the market.
Crypto investors are usually encouraged when assets such as Bitcoin are backed by big companies, entrepreneurs or even countries.
History was made when El Salvador became the first country to accept Bitcoin as legal tender in September.
According to Nigel Green of deVere Group, three more countries could adopt crypto. Cryptocurrency Bill: More Than 36% of Urban Indians Oppose the Upcoming Bill
Experts say another key area regulators will likely focus on next year is stablecoins . These are tokens whose value is tied to the price of existing assets like the U.S. dollar. Tether, the world’s biggest stablecoin, is controversial as there are concerns about whether it holds enough assets in its reserves to justify its peg to the dollar.
(The above story first appeared on Morning Tidings on Jan 06, 2022 11:30 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website morningtidings.com).
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