The bull run last year didn’t happen even though many well-known investors gave their cryptocurrency predictions. Even though a lot of institutions invested, Bitcoin ended the year lower than anyone expected. So just about all of the crypto predictions were wrong.
If any were right, please let me know.
After listening to many talking heads and reading reports from popular sites, there weren’t very many who were correct. I can’t think of anyone.
So will my prediction be correct? Most likely I won’t be correct either.
But I will give my best guess and also share with you what I plan to buy. Right now I am not buying anything since I am waiting for President Biden to give his thoughts on cryptocurrencies this month. This could drop the market further depending on what he says.
I have no confidence he will say something that causes Bitcoin’s price to rise. I have a bearish view of what he plans to say.
When he took office, everyone had hoped his administration would favor the Bitcoin market.
He brought in a forward-thinking team. Unfortunately, his administration has not shown much to make a difference in the market. But then, they are also not doing anything to hurt the market. At least not yet.
Yes, the Bitcoin Exchange Traded Fund (ETF) was approved but who is really trading Bitcoin Futures? This is helping companies with money so they could get in the game. This does not for the average investor.
Everyone wants a Bitcoin Spot ETF which gives an investor an opportunity to invest in Bitcoin. This will break down the barrier that prevents some people from getting involved.
Then Congress tried to slip in a bill eliminating the wash sale rule which allows you to write off your crypto tax losses. Even some of your Congress members don’t care for crypto.
Hopefully, you haven’t sold your crypto. That could be the worse thing you could do because Whales are buying up your Bitcoin. You should be accumulating.
You may have to wait a little longer to see a sustained upward movement in price. But it will happen one day.
On the positive side, there has been a lot of good in the cryptocurrency world. Ethereum is rebranding to Execution Layer (ETH 1.0) and Consensus (ETH 2.0) as they work on upgrades to 2.0.
Last year could be called the year of NFTs as artists were making a profit selling their gems. Many companies are offering these or planning to one day.
Virtual worlds appear to be the next wave as Meta and other companies prepare for Web 3.0. It will be interesting to see how crypto plays a part in these. Decentraland and other NFT cryptocurrencies are establishing their framework.
My investment plan for this year
After four years and some change investing, I look at mistakes I made. I invested too heavily on some altcoins that did okay. But I could have done better if I held on to some longer.
Another option I should have done was keep more of my holdings in Ethereum. I plan to build my Ethereum holdings more this year and not spend any more money buying altcoins.
Yes, some are very inexpensive but many don’t have a proven record. Some of these altcoins will fail to leave investors mad. You should invest in some, but keep a balanced portfolio and don’t forget about the King driving the most transactions.
Also, I read what Bitmex founder, Arthur Hayes, wrote about the price of Bitcoin if prices continued to drop. He said he would sell most of his altcoins and maintain his Bitcoin, Ethereum, and a few other keepers.
Ethereum has a part in buying NFTs, altcoins. A key feature of Ethereum is that it allows the development of smart contracts and building decentralized applications on the Ethereum blockchain.
Also, with Ethereum changing to ETH 2.0, this could help lower gas fees. Under EIP 1559, Ethereum is burning tokens. Today over 1.7 million Ethereum has been removed.
This deflationary method allows Ethereum prices to increase as less Ethereum is available. This will create less strain on the blockchain as less will be available.
I am bullish on Ethereum and personally, I have seen many issues with the Eth killers such as Solana and Cardano. I own some Solana and sold Cardano last year as prices were dropping.
As for price prediction, I don’t have a positive outlook for this year. There are too many external issues and I have a feeling that cryptocurrency buyers will not see a climb on Bitcoin, at least not this year. I could be wrong, but I really want to see what President Biden says about cryptocurrencies. His comments could crush the cryptocurrency market sending prices down further.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.