Bitcoin hit the worst performance since 2012 How will it "go" in the future?

Per reporter: Zhang Lingxiao Lan Suying Per editor: Lan Suying

U.S. inflation data reached new highs, and market expectations for an early Rate Hike by the Federal Reserve continued to rise. Affected by this, Bitcoin continued to decline at the beginning of the year, rising in only 6 trading days so far this year, the worst annual opening performance since 2012. The Daily Economic News reporter connected to the cryptocurrency trading platform Nexo to analyze the next price movement of Bitcoin.

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Bitcoin started the year unfavorably

On January 10, Bitcoin fell 6% briefly below the $40,000 mark, and as of that day, it had fallen 14% this year, making it its worst annual start since 2012. As of January 15, Bitcoin has only gained 6 trading days this year and is currently hovering around $43,000 per coin.

In 2021, the participation of institutional investors pushed Bitcoin to a high of $69,000 in November of that year, with a cumulative increase of 57.81% for the whole year. But entering 2022, Bitcoin continues to decline, and how its price will change this year is the focus of market attention.

On Wednesday, after the release of record inflation data in the United States, cryptocurrencies ushered in a wave of gains, with Bitcoin up 3.3% and Ethereum up nearly 5% at one point. The analysis believes that in the context of high inflation in the United States today, the Policy Change of the Federal Reserve this year will be one of the important factors affecting the price of Bitcoin.

At present, the Fed has conveyed to the market that it may shrink its balance sheet early, and the agency's expectations for interest rate hikes are strengthening. Jay Hatfield, CEO of financial services firm Infrastructure Capital Advisors, believes that cryptocurrencies are likely to remain under pressure as the Fed tightens liquidity. He expects bitcoin to fall below $20,000 by the end of 2022.

How will Bitcoin "go" in the future?

Antoni Trenchev, founder of cryptocurrency trading platform Nexo, also said in an interview with the Daily Economic News that the news of the Fed's interest rate hike may put the price of Bitcoin on a downward trend, with the price starting at around $30,000.

Trenchev expects more turbulence in the Bitcoin market in the coming months. "In the second quarter, the Fed's bond purchases are not yet over, and we may see some sell-offs, but there is no need to worry too much. I think bitcoin is likely to reach $100,000 around June after a series of shocks. ”

However, a customer survey conducted by JPMorgan Chase showed that only 5% of people believe that bitcoin will rise to $100,000 by the end of 2022, and more than 40% of companies expect bitcoin to exceed $60,000.

In addition to the Fed's policies, Trenchev believes that factors influencing Bitcoin include the acceptance of Bitcoin by major institutions, as well as global regulation of cryptocurrencies and blockchain technology. "Throughout 2021, crypto assets have been restricted around the world."

(Note: The above interview content only represents the views of the interviewee, does not represent the position of the daily economic news, and does not constitute investment advice.) ）