Bitcoin: What investors need to consider in the crypto market in 2022

 Bitcoin and most large-cap cryptocurrencies got off to a weak start in 2022: the expected bull run at the end of the year did not materialize, the markets are largely trading sideways.

BTC, for example, has lost 3.35% in value over the past seven days. Ethereum, on the other hand, the second-ranked cryptocurrency by market cap, has been trading since 12/28. back under $4,000, currently costs $3,814.

Losses were also seen on Binance Coin (BNB, -4.5%), Solana (SOL, -4.3%), and Cardano (ADA, -5%). The mood on the markets: worried. Many investors are expecting the next crash. The much-cited “Fear & Greed Index”, an indicator of investor sentiment, is currently at “extreme fear”.

But is that justified? Is the next crash really imminent? What development do experts expect, what can investors expect in the coming months?

Bitcoin crashing again?

First to the most important cryptocurrency, the Bitcoin. Traders and chart experts are currently reluctant to make price forecasts - the short-term trend seems too unclear. However, the blockchain researchers from Santiment comment in a current analysis: More and more investors are withdrawing their bitcoins from the exchanges and storing them. This is generally considered a good sign, also in perspective for the further course in 2022.

It shows that investors are holding on to their coins instead of selling them. According to Santiment, there are currently 25% fewer bitcoins on the exchanges than two years ago. Apart from that, nothing has changed in Bitcoin's fundamentally bullish macro situation. Banks and major institutions are pushing towards BTC, the adaptation is making great strides. A development that may accelerate in 2022. That's what Sam Bankman-Fried, founder of the crypto exchange FTX and, at 29, one of the youngest billionaires in the world, believes. In his estimation, the crypto industry will experience significantly more regulation in 2022 - and this in turn will allow large investment banks and pension funds to enter the industry. However, according to the crypto entrepreneur, this will not happen too quickly.

Bitcoin: How to properly protect your cryptocurrencies from theft

However, he has spoken to every major bank, every pension fund - they all have an eye on the sector: "Many of them have started their activities in this area, but it is slow going and takes time." The vegan is safe: A lot will happen in the crypto industry in 2022 – especially due to the new regulatory framework.

Ethereum becomes Ethereum 2.0

A cryptocurrency that is likely to gain momentum alongside Bitcoin in 2022 is Ethereum. The background: In the next few months, there will be an important milestone at ETH. The leading smart contract platform completes the long-awaited upgrade to "ETH 2.0". As a result, the Ethereum blockchain will be switched from the previous proof-of-work consensus model (PoW, known from Bitcoin) to a proof-of-stake model (PoS).

Metaverse coins: is it worth investing in?

Until recently, hardly anyone knew the term – then Mark Zuckerberg quickly renamed Facebook Meta and promised to invest billions of dollars in building such a virtual world. This brought numerous Metaverse projects to the attention of investors and caused a boom in associated coins. Assets such as Decentraland (MANA) or The Sandbox (SAND) have appreciated by thousands of percent over the last year. It can be assumed that Metaverse cryptocurrencies will also be successful this year.

Crypto markets in 2022: What investors should consider

But what exactly should investors consider in 2022? What tips will help to avoid losses and move safely in the markets?

Here are three tips for cryptocurrency growth in 2022:

1:  Don't go after "exploding" cryptocurrencies: Even if it seems tempting and feels "right", investors are well-advised not to get into a cryptocurrency just when its price is going through the roof. It is important to remember that every parabolic rise is followed by a correction - and this enables a purchase on better terms. The key here is to wait and see.

2: Make a plan – and stick to it: Think in advance what you intend to do with your investment. Should it only be a short-term investment that will possibly be sold in the same year at the next strong increase? Any tax consequences must then be taken into account. The tax authorities are currently taking action as soon as cryptocurrencies that have not been owned for a year are sold again. However, if the purchase is more than twelve months ago, the sale is also tax-free. If it is a long-term investment, you can also face violent price fluctuations with ease.

3: Beware of scams and fraud: 2021 was a record year for crypto scammers. According to a Chainalysis report, cybercriminals have been able to steal $7.7 billion in the last twelve months. Losses, a not insignificant proportion of which could possibly have been avoided with a little care. It is not without reason that a simple principle applies in the industry: DYOR. This is short for "Do Your Own Research" and means: Every investment should be preceded by thorough research on the respective cryptocurrency. Good contact points for this are, for example, the popular portals Coingecko.com or Coinmarketcap.com. Here you will find many further links to a cryptocurrency, for example to the white paper. A Twitter search with the so-called ticker symbol (e.g. $BTC) of a coin also helps to find out opinions. Twitter is considered the dominant social media platform for crypto enthusiasts - almost all traders, analysts, and industry observers cavort here. The search is very simple: You only have to enter the relevant ticker symbol (e.g. $ETH for Ethereum) in the field provided and you will then receive all relevant statements on the topic.