Future Predictions of Cryptocurrency 2022
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For those new to cryptocurrency, understanding where Bitcoin and Ethereum stand can be somewhat confusing. Seemingly up one day and down the next, the cryptocurrencies are certainly keeping some experts guessing. But is there any way to tell what lay ahead for both Bitcoin and Ethereum? There are some key differences between the two that make the direction each could potentially go in somewhat different. In this article, we take a look at some future predictions where Bitcoin and Ethereum are concerned.
What Exactly is Bitcoin?
Let's first begin with a basic Bitcoin primer as this is the premier cryptocurrency, or at least the one most commonly known even among those who do not happen to own any such cryptocurrency. Bitcoin is based upon what is called blockchain technology. Bitcoins are subsequently mined by independent miners who then create "blocks"; these blocks are where Bitcoin transactions are stored. This means that everyone connected to the network can access records of such transactions and this, in turn, helps to make security where Bitcoin is concerned super tight.
What is Ethereum?
Ethereum also utilizes blockchain technology, but this is pretty much where the similarities stop as it differentiates from Bitcoin in some important ways. Ethereum was not created solely for transactions. It has its coding language that is used to develop decentralized apps. So, another way of understanding it, Ethereum was intended to allow developers a network where they can then launch their cryptocurrencies and monetize various components of their work, among other applications.
The Future of These Cryptocurrencies
Let's first take Ethereum. Some contend that the scalability of this particular cryptocurrency may pose issues down the road with the growth of the network. Some of the early more popular apps have experienced significant issues. Early on, Ethereum was only dealing with a fairly small number of transactions—such that it could easily handle. As it has taken off and has become more popular, the ability of the network to handle what lies ahead is in question. Its immense popularity is thus ironically in some ways its problem.
As far as Ethereum's future goes, it really will largely come down to how it copes with its immense popularity. Ethereum's founder has launched a plasma protocol; this helps to cut down on unnecessary data and simplifies transactions across the board.
When it comes to Ethereum's actual price, predictions vary. It is currently trading near $2600-2700. Of course, there can be fluctuations but there is a definite uptrend being seen where Ethereum is concerned. Some are expecting that Ethereum's price surges beyond $3000 which would be a record high for the cryptocurrency.
Then there is of course Bitcoin. What predictions are in store for the cryptocurrency behemoth? Scalability also comes into play when dealing with questions regarding Bitcoin's future. With more and more people using the coins, the miners are getting backed up. Authenticating transactions can take time and so transaction speeds are lagging. If a user does want to speed up their transaction time, they do have the option of paying more to do so. This is changing and more robust transaction times are being seen, but depending on how widely used Bitcoin becomes, the crypto-coin could face a bit of a tough road ahead.
When it comes to Bitcoin's pricing, as we have seen, the numbers at which it has been trading are truly impressive and incredibly high given where the cryptocurrency began. However, that said, there have been several price crashes in the past few months that do have some investors a bit on edge.
On the flip side though, many cryptocurrency experts do believe that Bitcoin, in particular, will see a very good year and end 2021 at record highs. With some people believing that Bitcoin could eventually become the "gold standard" quite literally, financial analysts do suggest buying now before Bitcoin potentially reaches a price of 250k or even higher.
Not everyone though sees a 250k plus future for the cryptocurrency; some do see it remaining under 100k for this year if not beyond. Several things could happen that might hasten a large Bitcoin crash. A major hack or breach of the network for one could send investors running. If a big-time player such as Tesla suddenly pulls out this could also send Bitcoin prices tumbling. And these are only a couple of the more dire scenarios people have conjured.
Some Tips for Investing in Cryptocurrency
Whether you are brand new to cryptocurrency investing or have been at it for a bit, you can always benefit from some expert advice—especially with an investment class that is so new.
- Have an investment goal in mind. This is the case with any type of investment you plan to make. Are you in it for the long or short term? Set that milestone number and stick to it. You may want to talk to a financial advisor who does have some experience with cryptocurrency investing.
- Don't be afraid to diversify. If you opt to invest in cryptocurrency, putting all your eggs into the Bitcoin basket is probably not the wisest move. What happens if Bitcoin does tank? These are volatile entities we're talking about. Look into both Bitcoin and Ethereum. There are others as well such as Litecoin and Dogecoin that are increasingly gaining in popularity among investors.
- Have an investment cap. Dumping an entire paycheck into something that fluctuates so rapidly like cryptocurrencies isn't the best idea. Determine your risk tolerance and then set a cap for how much you are comfortable investing.
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