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In 2022, Bitcoin And Other Cryptocurrencies May Become Less Volatile

Different silver cryptocurrency coins with golden bitcoin isolated on white background

Bitcoin prices have been on a roller coaster ride this year, and they are expected to end the year considerably higher than they started.

One bitcoin is now worth just under $49,000, a staggering 66 percent increase from January’s lows. However, the leading cryptocurrency is down about 30% from its November high of nearly $69,000.

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There’s no doubt that cryptocurrency has entered the mainstream. Bitcoin accounts for around $920 billion of the entire value of all cryptocurrencies in circulation, which totals more than $2.2 trillion.

Ethereum, often known as ether, is beginning to bridge the gap. Ethereum, a famous cryptocurrency for smart contracts and non-fungible tokens (NFTs) that have swept the art and collectibles sector, has a market capitalization of $475 billion.

This year, the price of an ether token has more than quintupled, rising from roughly $730 to nearly $4,000.

Individual investors can also choose from a number of bitcoin exchange-traded funds (ETFs). ETFs that invest in other big cryptos may also be on the horizon.

“The next possible step is for additional ETFs for other coins to launch. There probably will be an ether ETF in early 2022,” said Nick Elward, senior vice president and head of institutional product and ETFs at Natixis Investment Managers. “There probably will be an ether ETF in early 2022.”

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Crypto has attracted the attention of major professional and institutional investors, including famous fund managers George Soros and Stanley Druckenmiller. Nonetheless, the recent drop serves as a harsh reminder of how fickle bitcoin and other cryptocurrencies may be.

Many investors flocked into bitcoin in 2017, and prices skyrocketed from $1,000 per coin to well under $20,000 by December.

Then followed the crash, with bitcoin falling to approximately $3,500 by the end of the year. Those prices have certainly rebounded — and then some — but the coin did not return to the $20,000 threshold until December 2020.

Such breakneck swings in crypto prices are probably here to stay. The key, experts said, is for investors to learn to stomach them and ride out the inevitable ups and downs.