Bitcoin, the world’s largest crypto player in terms of market cap, could end the year flat. And if that statement makes the investor in you sad, don’t worry because Bitcoin or BTC haven’t encountered a stumbling block yet. Instead, the crypto giant seems to be taking a breather after an illustrious year with a multitude of highs, especially at breakneck speeds.
And what is even more convincing is that although BTC made some profits, crypto investors in India flocked to leading exchanges like CoinSwitch Kuber for new purchases in large numbers.
But that’s not why we are having this discussion. Instead, in the following sections, we’ll briefly discuss the larger moving factors of Bitcoin in 2021, including those that boosted gains or even pushed the GOAT (the greatest of all time) to bearish levels. We’ll also talk about how these factors could play a wide-ranging role in 2022, given the Indian and global craze for Bitcoin and even Altcoins.
So let’s dive deep into the factors behind Bitcoin price movement, not necessarily in the order in which they occurred:
China’s ban
The mid-year announcement had a significant impact on Bitcoin’s prices, but only for a short time. While China took the condescending move and Bitcoin gave the cold shoulder, the global sentiment remained positive.
And while some other countries might avoid Bitcoin in the future, especially as a payment system, China’s ban has pushed BTC evangelists more towards the green mining prospect, allowing investors to make the most of the short but sharp decline.
Mass recognition and institutional acceptance
Beyond the China ban on Bitcoin, talks about mass recognition and institutional acceptance rose. Some of the blatant examples are Microstrategy’s positive stance when it comes to bolstering their entire BTC portfolio, especially by consistently buying the dips. In 2021, Elon Musk, one of the most credible crypto influencers of modern times, even spoke in detail about his position at Bitcoin.
Bitcoin’s soaring popularity could take on a stronger form in the future as institutional acceptance grows insanely. Additionally, the crypto space is expected to expand even more in the coming days as companies like Grayscale launch Bitcoin-linked products.
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El Salvador’s pro-bitcoin stance
And how can we forget El Salvador’s introduction of Bitcoin as legal tender, which influenced several positive conversations and global assumptions, and even gave this greatest crypto player a lot of credibility? El Salvador hasn’t stopped legalizing BTC as legal tender. Instead, the country’s optimistic leader, Nayib Bukele, has been quite vocal about the newly purchased positions and the emergence of a new and tax-free physical facility, i.e. the Bitcoin City.
Bitcoin ETFs
In 2021 three “Bitcoin Futures” ETFs were approved, which also paved the way for the introduction of crypto as a questionable but investable and inevitable asset class. And until 2022 we could see a global upward movement in Bitcoin, led in particular by the pure ETF game.
Speculative regulations
If you’ve been a loyal crypto investor with positions on leading exchanges like CoinSwitch Kuber, you may have had to go through some stressful times mainly led by speculative regulations. And while the Indian government ponders a supportive framework spearheaded by its own digital currency, the outlook for other private crypto players still looks decidedly promising and not as tough as speculation suggests.
As for the uncertainties, expectations for the upcoming progressive regulation were the same on all exchanges. And as soon as a detailed crypto bill is available in 2022, we can expect a more comprehensive scenario for Bitcoin and other crypto players in the future.
Lukewarm taproot reaction
Bitcoin as a blockchain has often been ridiculed due to the higher transaction fee and slower transaction rate. And while the newly introduced Taproot upgrade aimed to fix the same thing while providing a framework for the Bitcoin blockchain to better accommodate smart contracts, NFTs, and DeFi, the upgrade received a lukewarm response.
While we wouldn’t delve into the technical details of the Taproot upgrade, it drove prices up to $ 69,000 in November. But on the other hand, Bitcoin was unable to hold the highs as the Bitcoin community is still slowly grappling with the upgrade, which could be rolled out gradually in 2022.
The long-term effects of the Taproot upgrade are still investor and HODL specific as the network can now handle and process multiple smart contracts, much like Ethereum.
Global fear
Ever heard of fed tapering? This means a systematic reduction or decrease in the monthly allocation of funds for the purchase of assets for the inexperienced. And while this may sound like a simple concept, it aims to bring down inflation by encouraging fewer bond purchases. Since Bitcoin is a volatile asset, talks about early Fed tapering seem to have somewhat discouraged short-term investors.
However, this shift in priorities is not expected to affect the HODLers as they appear to be quite optimistic about BTC in the future.
Have we crossed the abyss?
As you may have seen, it has been a pretty good year for Bitcoin, marked by several great announcements and opportunities. And despite a handful of not-so-good global factors and growing fear among short-term investors, the market structure still looks incredibly strong through 2022. However, investors at CoinSwitch Kuber and other leading Indian exchanges are still proceeding with caution and skepticism as to which is the right approach given the volatility.
Still, volatility could gradually ease over the next few months, led by positive institutional sentiment. And once the Omicron-related concerns fizzle out over time, Bitcoin could continue its upward trend, bringing smiles to investors’ faces.
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