After a hawkish turn by the Federal Reserve took some steam out of cryptocurrencies at year-end while largely sparing other risk assets, central bank policy is taking a key role in the debate about the outlook for tokens in 2022.
To what extent will Jerome Powell’s Fed tighten policy to stem inflation? The answer to that question will help determine whether Bitcoin follows its 60% gain in 2021 with another banner year, some analysts say.
Another school of thought holds that as companies from Meta Platforms Inc. (formerly Facebook) to Apple Inc. push deeper into the metaverse and consumers keep piling into non-fungible tokens, that will push crypto higher regardless of the macroeconomic forces at play. Just witness the sale last year of an NFT artwork for $69.3 million at Christie’s, or the loosely organized group of crypto investors that battled billionaire Ken Griffin at an auction for a copy of the U.S. Constitution
Bitcoin traded at around $46,100 on Tuesday as of 9:52 a.m. in Hong Kong, up about 0.2% on the day. Here, four market-watchers discuss their outlook for the token and wider crypto universe in 2022:
“We are bullish Bitcoin long-term, based on our long-term trend-following gauges,” Katie Stockton, founder and managing partner of Fairlead Strategies LLC, said in an email.
“We assume the long-term uptrend will maintain itself and a more decisive breakout to new highs would allow for an impressive measured-move projection of approximately $90,000. For now, a corrective phase still has a hold, although there are potential signs of short-term downside exhaustion.”
“The No. 1 influencing factor for Bitcoin and cryptocurrencies in 2022 is central bank policy,” Antoni Trenchev, managing partner of crypto lender Nexo, said in an email. “Cheap money is here to stay which has huge implications for crypto,” as “the Fed doesn’t have the stomach or backbone to withstand a 10%-20% collapse in the stock market, along with an adverse reaction in the bond market.”
I didn’t like this