New research expects a gloomy year for Bitcoin as DeFi and DAOs rise
Another major player in the cryptocurrency world is forecasting a dismal year for Bitcoin (BTC) in 2022. Following the Federal Reserve's and other central banks' tightening of liquidity measures, Huobi Research believes that BTC will enter a bear market. On the brighter side, decentralized finance (DeFi) will continue to expand and adapt, with DAO governance eventually becoming a major driver of activity on the chain.
Bitcoin and Ether (ETH) prices plummeted on Thursday night on the cryptocurrency market, shedding about $150 billion from the market. Over the last 24 hours, Bitcoin has lost roughly 7.9% of its value to as low as $38,788 at the time of writing.
2021 was a watershed year for crypto, with industry growth reaching new heights. DeFi, nonfungible tokens (NFTs), cryptocurrency adoption, blockchain usage and other factions all had big years. Blockchain technology has also been brought to the forefront via Web3 and the metaverse. Regulators are also catching up, with 40 nations having established over 150 distinct rules for cryptocurrency according to the Global Crypto Industry Overview and Trends report published by Huobi Research in collaboration with Blockchain Association Singapore.
While several of these industries will continue to develop this year, it may be a challenging year for BTC. According to Huobi's analysis, the U.S. Fed has started to taper, which indicates that dollar liquidity is losing its return.
In 2013, the Fed took a similar step that was followed by a two-year bear market. While the market has changed dramatically and there is far more liquidity and BTC holders, Huobi believes another such move could be on the cards.
Despite the gloomy forecast for BTC, Huobi believes that the wider industry
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