Exchange CEO Warns 2022 Could See Bitcoin Crash Amid Huge Ethereum, BNB, Solana, Cardano And XRP Sell-Off
Bitcoin and cryptocurrency prices have fallen sharply this week, with the combined value of the crypto market losing almost $1 trillion since its peak in November.
The bitcoin price has fallen to lows of just over $45,000 per bitcoin, a more than 30% decline from an all-time high of almost $70,000 last month. Meanwhile, other major cryptocurrencies, including ethereum, Binance’s BNB, solana, cardano and Ripple’s XRP have also struggled—all dropping double-digit percentages from their highs.
Now, as bitcoin, ethereum and other cryptocurrencies fall in the face of global central bank policy tightening along with global stock markets and other assets, the chief executive of the U.S.-based Kraken crypto exchange has warned he thinks the bitcoin price could fall dramatically in 2022.
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“A lot of people see anything under $40,000 as a buying opportunity,” Kraken CEO Jesse Powell said in an interview with Bloomberg this week, adding the bitcoin price could drop to below $40,000 this winter.
“I was personally buying when we dipped back close to $30,000, a few months ago. A lot of people have some dry powder on the sidelines just waiting to come back in at rock bottom prices.”
Earlier this year, Powell made headlines when he predicted the bitcoin price could hit $100,000 before the end of 2021.
“It’s hard to know where [the bitcoin price] goes,” Powell said, but couching that he’s still bullish on bitcoin in the long term. “When you look at a long-term trendline of bitcoin and it’s just up consistently. I always tell people, ‘If you think about buying bitcoin, think about it as a five-year plus investment.'”
Earlier this month, other bitcoin and crypto market watchers began calling out some of the more ambitious bitcoin price predictions. “$100,000 by the end of the year is a difficult prediction to make. I think $100,000 could be in target in 2022 but this year, I’m not so sure,” Bitwise chief investment officer Matt Hougan said in an interview.
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Others are taking a watch-and-see approach to the bitcoin price as the U.S. Federal Reserve and other central banks around the world move to taper their Covid-19 pandemic stimulus measures.
“The downward trajectory pertaining to bitcoin currently remains intact as market participants continue to price in fundamentals,” Tammy Da Costa, analyst at DailyFX, wrote in emailed comments.
“For much of this year, rising inflation has supported bitcoin prices allowing it to climb to yet another all-time high just last month. However, with global policymakers now expressing a more hawkish tone, bitcoin prices have stabilized above $45,000 which continues to provide support for the imminent move.”
This week, the Federal Reserve said it’s expecting to raise interest rates three times in 2022 and will accelerate the winding down of its huge bond-buying policy in the face of soaring inflation that’s hit a 40-year high.
“Much like gold and other safe-haven assets, investors have used bitcoin against rising inflation,” added Da Costa.
“With higher interest rates and a faster pace of tapering now expected to proceed, further rate hikes may pose as an additional catalyst for price action over the longer term. From a technical aspect, the fact that prices have retraced by over 20% since the November high confirms that bitcoin has entered into a bear market. Although price action is currently trading within a well-defined range, bulls may struggle to regain control over the systemic, prominent trend, at least for now.”