Since interest rates have been rising, crypto investors will be keeping a close watch on the market heading into 2022 in order to see how it will fare.
Speaking with CNBC, general partner and founder at Race Capital, Alfred Chuang discussed his outlook for 2022 in the cryptocurrency space.
Simply looking at trading volumes for cryptocurrencies between 2020 and 2021, Chuang noted, we have witnessed trade volumes increase from around $50 billion per day to $100 billion per day, while the general Nasdaq’s trading volume has remained almost the same at $200 billion during the whole year.
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With the rise in Web3 participation highlighted by the increase in trading volume and with Web3’s long-term viability in mind, he suggested it’s reasonable to expect that the whole cryptocurrency industry, including Bitcoin (BTC), will be prevalent in 2022.
“So I think as we’ve seen more participation in Web3, and Web3 is here to stay, you can only imagine all of crypto is going to be very hot going into 2022, let alone Bitcoin itself.”
Bitcoin dealing with interest rates
The CEO noted the similarity between the wobble experienced by large tech businesses around fears of higher interest rates after experiencing a higher interest rate environment in 2022 and the fact that Bitcoin saw a similar correlation towards the tail end of 2021.
Due to recent weakness in that trade leading up to the end of the year, the CEO was quizzed on whether he believes BTC would be able to resist any threat from increased interest rates.
“I’m sure that everything is subjective volatility as we have seen in March of 2020 when the whole market went down, Bitcoin also goes down. So I don’t think Bitcoin is completely immune from volatility itself but if you look at this as a hedge it is a terrific long-term hedge for currency volatility,” he said.
Slew of Web3 activities to come in 2022
Chuang highlighted a flurry of activities in Web3 will take place in 2022, and these activities will encompass not just Bitcoin but also all of the other layer one type cryptocurrencies at the time.
“Look at activities in Web3 which will involve not just Bitcoin but all the other layer one type cryptocurrency it’s gonna be a lot of activities going into 2022 that gives us hope, and I think a lot of optimism that of all crypto-based products are going to do really well in 2022.”
Notably, the cryptocurrency market has grown significantly overall in 2021 despite Bitcoin’s dip from its all-time high in November.
As Quantum Fintech founder Harry Yeh suggests, assets such as Bitcoin operate as a significant buffer against inflation; the present inflationary atmosphere provides the ideal setting for becoming engaged in the crypto industry.
Watch the video: Race Capital CEO: There may be a surge for bitcoin to over $100,000 by the end of 2022