Let’s look at the big picture before getting into 2022 bitcoin price prediction. Things will get worse before they get better in the “real” world. Inflation seems to be remaining above 5% throughout 2022, while late year interest rate hikes stall the stock market’s momentum and hurt growth stocks (with a higher probability we may experience the S&P dips next year). That will be good for crypto short-term, but risky in the medium-term, as more crypto companies and their users get deplatformed and censorship from western tech and banking platforms accelerates amidst the Biden administration’s crypto crackdown.

We’re at the brink of a total transformation of the global economy. One that’s bigger than mobile, and maybe even the internet itself. All this lead us to a key question, “where we are in this particular crypto market cycle”, the tail winds remain strong and the capital markets flush. One way we could probabilistically split among the following three scenarios:

1. Likely, we experience a blow off top before the end of Q1 2021, followed by a shallower, but still painful multi-year bear market;
2. Rocket to a 10X ($20 to $30 trillion) bubble that lasts all year, and sits on par with the dotcom boom in real dollars – unlikely, but possible given accommodative monetary policies worldwide, neverending government spending, and crypto’s accelerating narrative momentum;
3. March slowly and steadily higher into perpetuity (the “supercycle” thesis).

Ironically, the most bearish case here (Q1 blow-off top) may be the most bullish long-term and vice versa. “Hyperbitcoinization” and crypto’s permanent ascendance at this stage of development would only happen against a very dystopian backdrop indeed.

Bitcoin Price Prediction 2022 & Beyond

The crash, which we all know is coming, might be more muted than those of prior cycles, but how about the remaining upside? Even with the tailwinds we just discussed, doesn’t it just feel a little toppy? The $30 billion Shiba Inu market caps, the Times Square NFT billboards? What are the top signals I’m looking for bitcoin is as follows.

Bitcoin, the king has no real rival. As a monetary asset with no earnings, it’s an asset that is priced vs. valued, which means it’s almost always judged on a relative basis to its analog cousin, gold. But there are “fundamentals” worth tracking for bitcoin, too!

The best bogey may be the market value to realized value metric popularized by Coin Metrics. That’s the ratio of “free float” bitcoin market cap (coins that have moved in the past five years) to “realized value” which sums the market price of each bitcoin according to the time it last moved on-chain. Market cap can stay the same while realized market cap spikes and vice versa. One is a snapshot of bitcoin stock times price. The other is a dynamic measure that brings flow into the equation as well.

If you aren’t a HODLer, and can’t stomach four year bear markets, then whenever MVRV hits 3 tends to be a good time to take gains. (Sell a kidney or a newborn to buy when MVRV falls below 1.) In the three previous “double bubbles” – which you can really only see using a metric like MVRV since previous “bubbles” barely register on a price chart – the amount of time spent above 3 has gotten progressively shorter. In 2011, MVRV stayed above 3 for four months. In 2013, it was there for ten weeks. In 2017, three weeks. Earlier this year, it was three days.

If history were to repeat itself, what’s that mean in dollar terms? Hitting a MVRV of 3 again this year would take us to the $100,000-125,000 range. Not bad!

If things went completely bonkers beyond that, the next target for bitcoin would be the gold market cap. At today’s prices, parity with gold would bring us a $500,000 bitcoin. So there may still be a 10x investment opportunity there, but even that moon case offers a relatively low ceiling compared to bitcoin’s historical returns. (Unless, of course, the ceiling completely disappears, which means fiat currencies have failed and we’ve defaulted to pricing things in bitcoin. 1 BTC = 1 BTC)

Bitcoin is great, what about Ethereum Price?

There’s been a lot of “flippening” talk from ETH mega-bulls recently. Could ETH overtake BTC this cycle? Unlikely. Not with Ethereum’s persistent scaling challenges, its Layer 1 competitors, and the willingness of infrastructure companies and application builders alike to embrace the likelihood of a multi-chain future. I continue to think it’s more interesting to consider whether Layer 1 platforms collectively flippen bitcoin in much the same way that the FAMGA market caps have overtaken M1 (Arthur Hayes for the analogy).

How about more generally speaking? Could ETH overtake Microsoft, Apple, or Google? That would be
a 3-5x from here. Could it eclipse all five combined? That would be a 15-20x, which feels like a tall order even if ETH at 5% of FAMGA market cap feels cheap.

How about betting on Ethereum Killers?

The new “it girl” of crypto (Solana) is gunning for the #3 spot in crypto market cap ($60 billion). But then again, so is Polkadot ($40 billion), and Avalanche ($30 billion). If the thesis for these alternative Layer 1 protocols is that they are higher beta plays than ETH that will eat into Ethereum’s market share dominance, then you’re forced to ask, “what about Terra ($16 billion), Polygon ($12 billion), Algorand ($11 billion), or Cosmos ($7 billion)? The relative value trades all come down to business development wins (app distribution) and recruiting wins (can you attract developers to build on non-Ethereum blockchains).

The “Ethereum killers” all have the money to compete aggressively, but as an investor your choices are to either pick winners, or buy the basket (short Ethereum Layer 1 dominance). Either way, these assets tether to ETH.

“Jewel in the crown” Particpate-to-Win in DeFi

Long DeFi, short the bankers, amirite!? Despite DeFi’s monstrous 2020 run, DeFi trades at less than 1% of the global banks’ market cap, which shows how much upside remains long term. Prices have stalled for some of the top DeFi protocols, but if you have conviction that crypto capital markets will displace centralized institutions at an accelerating clip, it may offer better risk-reward opportunities than elsewhere in the market today. That said, inter-protocol competition is fierce, regulatory scrutiny is coming, technical vulnerabilities are pervasive, systemic defaults could cripple the entire market, and high gas fees are crippling the unit economics. By many metrics (price-to-sales and price-to-earnings), DeFi remains compelling, but the math only works for whales right now.

Hopping on thehe new kid in the game, Metaverse and NFTs

Given the fact that NFTs are…non-fungible and illiquid, it can be difficult to ascribe any sort of reliable “market cap” to the NFT sector. DappRadar estimated NFT market cap of $14 billion in early September, a number that has risen since. Given the design space that NFTs have opened up for the entire crypto user economy, the long-term size and scope of this segment is scary big. Meltem points to LVMH ($375B?), while Su Zhu thinks we’ll see 10% of crypto ($225B today) in NFT market cap. I don’t think they are off, but that may speak more to the opportunity for NFT creators and infrastructure builders than it does to the investability of most specific NFT projects.

In Summary, a better way to prep for “Crypto 2022”

The conviction being developed in crypto investors lately is likability of crptos for the longterm and the short-term, but it’s the medium-term that can get yeh. “From what height do we crash?” sounds like a nice problem to have, but until you’ve lived through a crypto winter, you don’t actually get it.

What if market crash. If you are crypto beleiver, put on a helmet, embrace the cold, and take heed of these winter survival tips: unwind leverage early, cash out tax obligations when incurred, but for the love of god, do not try to time “the top”.

• On leverage: this should be self-explanatory: if you are not a professional trader, your leverage is merely a cash transfer to those who are. Crypto is volatile enough, with plenty of remaining upside. You don’t need to push your luck here, and blow up your entire personal balance sheet.

• On taxes: most people understand that they shouldn’t rack up credit card debt to purchase doggie coins, but will also totally overlook the “leverage” they take on by not planning – in December – to sell what they must to cover tax liabilities. If you started January 1, 2021 with $10,000, it swells to an actively traded $100k by December 31, and then tanks to $25,000 Jan 1, 2022, you owe the government more money than you have. Thanks for playing.

• On shorts: please do not short. Even if you’re right, you’ll likely fail to time the top and blow yourself up. When you lose, everyone will celebrate your demise and dance on your grave while they are getting rich. It will make you sad. Even if you win, no one will like you, and you’ll lose long-term. I don’t make the rules. Just here to help.

And one more thing for the falling knife catchers, who think “wow, this will be great. I can’t wait to buy discounted coins in the next bear market.” Crypto can always go lower than you think, for longer than you think, and it will. Crypto meme trading and reflexivity are a helluva drug. When the music stops, you’ll see the painful withdrawal, and it takes some time to detox.

Fasten seat belts to hop on a rollercoaster for a supercycle Crypto 2022!

Related Article: Dan Hollings “The Plan”: A Best Opportunity To Benefit From Crypto Wiggles

Disclaimer: Past performance is not indicative of future results, you could lose some or all of your money. Buying/selling digital currencies is extremely volatile and may not be suitable for all people as the price can change drastically in a short amount of time. Never risk more than you are 100% comfortable losing. Anyone wishing to buy/sell digital currencies should seek his or her own independent financial or professional advice.

Sponsered

Take The Advantage of Crypto Wiggle

A Best Opportunity To Benefit From Crypto Market Fluctuations

Successful Path to DeFi With Crypto Swap Profits

Crypto Swap Profits is a training and ongoing online mastermind with a focus on Decentralized Finance Crypto Trading.  This is an emerging area of trading and 99.9% of the world has no idea this even exists.  This is the cutting edge of Crypto Trading and there is a window right now before the rest of the world starts doing this.

Join Joel Peterson for a free webinar session where he’ll be going to share with you the Window of Opportunity in the DeFi crypto space. He will be sharing a TON of content and show you exactly what we are doing. At the end of the webinar, you will be able to go copy what he’s doing.  We like to call it “SWAP PROFITS“.

Start Earning Passive Crypto with Helium Hotspot Mining. Check It!

Earn FREE HNT Tokens Daily with Helium Hotspot. Start Your CRYPTO Passive Income Now!