According to a report published on the US website CNBC, financial experts are predicting that Bitcoin's value will fall and collapse in 2022, wiping out almost all the gains it has made in the past 18 months. The report cited experts warning that Bitcoin's price decline could repeat the kind seen in 2018, when it fell close to $3,000.

The cryptocurrency, which rose to an all-time high of around $69,000 in November, is now trading below $50,000, down nearly 30% from its price peak.

Carol Alexander, a finance professor at the University of Sussex, expects bitcoin to fall to $10,000 by 2022, wiping out almost all the gains it has made in the past 18 months.

Mr Carroll added that "if I were an investor today, I would think about getting out of Bitcoin as soon as possible, as the price is likely to crash next year". Her bearish case is based on the fact that bitcoin "doesn't have any fundamental value."

Carroll warns that history will repeat itself in 2018. At that time, Bitcoin fell to nearly $3,000 after soaring to a high of about $20,000 within months. As more institutional investors pile into the market, cryptocurrency proponents tend to think things are different this time around.

"There's no question that bitcoin's price chart looks like it's tracking a lot of historical asset bubbles and failures, and has the exact same narrative as other bubbles, but this one is different," said Todd Lowenstein, chief equity strategist at Union Bank Private Banking. In contrast to the common narrative that encourages investing in bitcoin as a hedge against rising inflation due to government stimulus, Mr. Lowenstein noted that a more hawkish Federal Reserve could hamper bitcoin's development. He added, "The tide of liquidity is receding, which will inappropriately hurt overvalued asset classes and speculative sectors of the market, including cryptocurrencies."

Still, not everyone is convinced that the cryptocurrency party will end in 2022. Crypto market analysts from the Japan Digital Asset Exchange noted that "the biggest risk factor has been identified, namely the Fed's quantitative easing policy, which is likely to de facto complete its pricing."

The first Bitcoin hub for an ETF

The biggest development crypto investors are looking forward to in 2022 is approval of the first bitcoin hub in the US for ETFs (Bitcoin exchange traded funds).

Although the Securities and Exchange Commission has approved the launch of bitcoin for equity investment this year, the product tracks bitcoin futures rather than confronting investors directly with the cryptocurrency itself.

Futures contracts are derivatives that require investors to buy or sell an asset at a future date at an agreed price. ProShares, a US ETF provider, tracks bitcoin futures prices rather than bitcoin itself, which could be too risky for novice traders, many of whom are invested in cryptocurrencies, experts say.

Ayar, vice president of corporate development and global expansion at Luno, a cryptocurrency exchange, said that "the Bitcoin Futures ETF, which launched this year, is generally seen as not very retail friendly because of the high cost of deferring contracts, around 5-10%."

Decentralized finance

Bitcoin has seen its market share decline as the crypto industry has grown, while other digital currencies such as Ethereum have played a bigger role in the market. Analysts expect that to continue next year, as investors increasingly look to other, smaller cryptocurrency markets for big gains.

Carol Alexander adds Ethereum, Solana, Polkadot, and Cardano to her list of cryptocurrencies to watch in 2022. She added, "I expect bitcoin to be half the market cap of smart contract currencies (such as Ethereum and Sorana) or less." Emerging developments in the cryptocurrency industry, such as decentralized finance and decentralized independent organizations, are "likely to be the fastest growing areas of the cryptocurrency industry," said Brian Gruse, web agent at cryptocurrency platform ICCHI. While decentralized finance aims to reinvent traditional financial products without intermediaries, decentralized independent organizations can be thought of as a new kind of online community. In 2021, the total amount of money flowing into decentralized financial services exceeded $200 billion for the first time, and experts expect the demand to grow further in 2022. Decentralised finance is part of a wider trend within the technology sector known as "Web3".