© Reuters
By Carjuan Cruz
Investing.com – Regulation, volatility and risk are some of the dangers lurking in 2022, and more broadly, all cryptocurrencies, a market that has already reached $1.8 trillion in market capitalization and is fueling passions both its followers and its detractors.
Regulation is undoubtedly the most important immediate factor: both in the United States and in Europe, there is a debate on the need for clear rules on digital assets, given their rise and the rapid market growth. But, far from being an obstacle for cryptocurrencies, it can be a key factor in mitigating their risks and further stimulating their development.
These are some of the topics discussed during the Investing.com digital event “What dangers await bitcoin in 2022?”, a meeting with the media and users of the Investing.com platform organized by its two Spanish-speaking editions, Investing .com Spain and Investing.com Mexico.
“What dangers await bitcoin in 2022?” was the first event focused on the cryptocurrency industry as part of a global effort to share with the public, users and journalists perspectives on the issues that matter most to financial markets, both locally than global.
This cryptocurrency forum brought together prominent speakers from both sides of the ocean: Felipe Vallejo, Director of General Affairs at Bitso (the first cryptocurrency exchange in Mexico); Jorge Gordillo, director of economic and stock market analysis at CIBanco (Mexico) and contributor to Investing.com; Juan Enrique Cadiñanos, Country Director at Admiral Markets Group (Spain) and David Fraile, Independent Analyst and contributor to Investing.com.
Rules, part of the Bitcoin Rule of Origin
At the event held yesterday, Tuesday, March 22, the four guests shared different views on cryptocurrencies, and in particular bitcoin, which dominates the industry.
“They will accelerate and in the next 18 to 24 months these regulations will accumulate, but they will mitigate the risks and obtain the technology necessary to make the most of them,” explained Felipe Vallejo, director of general affairs. by Bitso.
He clarified, however, that bitcoin itself is a regulated asset from the point of view of its rules of origin, and indicated that transactions mostly go through platforms that are regulated, and that on blockchains – called blockchain – all transactions are recorded.
“Ninety-five percent of cryptocurrency transactions in the United States go through an authorized exchange. And, in general, more than 95% of the total volume they move per day goes through platforms that are regulated by one way or another,” Mr. Vallejo added.
In the United States, regulation has already been mandated by the executive, so more speed is expected.
For Jorge Gordillo, director of economic and stock market analysis at CIBanco and contributor to Investing.com, greater regulation is the “necessary path” for cryptocurrencies. “The only way for a crypto to become sustainable is to become regulated,” the expert explained.
“Banks are regulated because they manipulate people’s resources. It’s a risky area. They can’t say they don’t have the money to guarantee people’s savings, because they can destabilize a whole country,” Gordillo said.
Price expectations
In 2021, bitcoin and cryptocurrencies were at all-time highs, but that development was halted, in part, by regulatory threats in China, as well as institutional backlash when Elon Musk announced that Tesla (NASDAQ: NASDAQ:) would no longer accept bitcoin as payment, as promised.
Now, as 2022 winds down its first quarter, the Russia-Ukraine conflict brings new moments of volatility. But for David Fraile, an industry analyst and contributor to Investing.com, the digital currency hasn’t suffered too many shocks, as many felt when the war started.
“With the Russian-Ukrainian crisis, people thought cryptos were going to fall further. I think bitcoin did pretty well,” he says.
However, he cautions that as long as it remains below 52,000 caution is warranted. Fraile believes that bitcoin should break through the resistance at $41,000 and $42,000.
Invest in cryptocurrencies, not just bitcoin
For Juan Enrique Cadiñanos, country manager at Admiral Markets Group, price expectations are positive, given that supply is limited. “As with any asset, the fact that supply is limited will benefit the price,” he said.
“For your information: when the Bank of Spain issued an official statement on bitcoin and the risks involved, bitcoin was trading at $6,800,” Cadiñanos said, referring to the rise in the cryptocurrency. currency since then, which today trades at around $42,000, according to data available on Investing.com.
However, Mr. Cadiñanos pointed out that competition from bitcoin is much greater today, thanks to the development of many other digital assets.
“Increased competition is also a risk for bitcoin. There’s a lot more competition than when it started in 2009, and now people who want to invest in cryptocurrencies, in general, aren’t just going to invest in bitcoin. bitcoin,” he explained.
A safe haven asset such as futures contracts?
For Mr. Gordillo, the biggest challenge for bitcoin is more focused on maintaining one of the principles that presided over its birth: to be an alternative to the dollar, or a so-called “safe haven” asset, like gold.
“Bitcoin is now a volatile financial asset, which also generates a risk for the confidence of those who hold it,” explained the economist.
However, Juan Enrique Cadiñanos believes it is possible for bitcoin to consolidate its position as a safe asset, although he believes this will happen over the long term, not by displacing gold.
“It’s hard for gold to lose its role as a safe haven, but in the future bitcoin can be a safe haven, of course….. That doesn’t mean bitcoin will win, it doesn’t. is not necessarily one or the other, both can be safe havens,” added Cadiñamos.
Investing.com’s digital event titled “The Dangers Lurking for Bitcoin in 2022” was streamed live for our users and the media, and had over 200 attendees.