Experts are optimistic for Crypto’s future stability

Bitcoin prices have seen significant spikes and dips this year as the coin is set to end 2021 66% up from its value in January.

A single Bitcoin (BTC) currently trades at around $49,000, a significant increase for the coin last January. However, the price also signifies an almost 30% from its record-high $69,000 last November.

As crypto continues to integrate itself into the mainstream the total values of cryptocurrencies have steadily increased throughout the year. The total value for all cryptocurrencies in circulation is about $2.2 trillion, with BTC accounting for roughly $920 billion. A rival to BTC, Ethereum is beginning to close the gap, however. Ethereum has set itself apart from Bitcoin by way of smart contracts and NFTs. The prices for Ether have more than quintupled this year jumping from $730 per coin to almost $4,000.

2021 has also seen the emergence of several bitcoin exchange-traded funds (ETFs) for individual investors to choose from.

“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.”

Professional and institutional investors such as George Soros and Stanley Druckenmiller have also been investing in crypto. Despite this, the most recent pullback is a reminder that cryptocurrencies are notoriously volatile assets.

“More than once we have observed a correction in the market,” Anton Chashchin, managing Partner of Bitfrost, a digital assets service provider, said in an email to CNN Business. “If institutional investors begin to take profits, then it can cause a ripple effect.”

Chaschin, however, believes that large firms will still hold BTC as a potential hedge against inflation and rising interest rates. “Even if the source of institutional investor interest is the Fear of Missing Out (FOMO), all of the institutional decisions have been made after careful consideration. These firms have come around to the potential benefits of cryptos,” Chashchin said.

With these cryptocurrencies finding a home in larger institutions this may help mitigate some of their volatility. While prices may still move sharply, experts believe that these shifts will not be as violent as those in the past few years.

“Having larger institutions with deeper pockets and steadier hands buying cryptos will help,” said John Wu, president of Ava Labs, an ethereum-compatible blockchain firm. “They can withstand the volatility.”

Source: CNN Business