The price of bitcoin has taken another large stumble. So much so that the world’s number one digital currency by market cap has fallen below $40,000. At the time of writing, bitcoin has fallen to a price of roughly $38,000 per unit, and now Huobi – one of the world’s largest and most important crypto exchanges – sees bitcoin experiencing a bear year in 2022.
Huobi Predicts a Rough Year for Bitcoin
Bitcoin has been falling into oblivion since last November. The currency rose to a new all-time high of approximately $68,000 before experiencing a series of dips that have now taken it roughly $30,000 deeper into the hole.
Huobi blames many economic factors, a big one being the behavior of the Fed. The company says that the US Federal Reserve is halting all bond and asset purchases as the economy shows signs of instability. With inflation now at a 40-year high, the global economy is resting on the shoulders of men who don’t seem to have any idea what they’re doing, and the world’s finances continue to look weak.
For the past two months, the Fed has been involved in a process known as tapering. Not only is it not buying bonds for the time being, but it has also stepped way from purchasing any mortgage-backed securities. Huobi Research Institute, the research division of the crypto exchange, has now published a report saying that the global economy is likely to have a lot less money put into it this year as the U.S. and governments everywhere experience higher fear of risk.
The report also says that bitcoin is likely to get affected given that the currency is sensitive to liquidity changes, and steady price declines could be in store for the asset if things in the global economy don’t repair themselves. In addition, the Fed has hinted that it’s looking to increase interest rates this year, which could wind up making things even worse.
The document is entitled “Global Blockchain Industry Overview and Trends 2020-2021 Annual Report.” It states very clearly near the beginning:
The possibility of bitcoin depreciation cannot be eliminated.
We’ve Seen Results Like This Before
Huobi is listed as being in Hong Kong, though it’s based in the African country of Seychelles. It is one of the largest crypto trading platforms in the world, frequently processing more than $1 billion in daily trades.
In many ways, a bearish 2022 is to be expected given how strong bitcoin was in 2021. If bitcoin were to experience heavy falls this year, it would virtually be a repeat of what traders witnessed in the BTC space in both 2017 and 2018. The former year saw bitcoin reaching a new all-time high, while the following year saw the asset dipping to new lows given how fast it rose during the prior 12 months.