Crypto Market Outlook and Investing Advice from Top Analysts

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2021 has definitely been a pretty big year for the crypto industry. But what comes next?

We’ve watched Bitcoin multiply hit new all-time high prices, heard regulatory talks that will have a massive impact on the crypto market, and even more investments from the world’s foremost companies. At the same time, investors’ interest in Cryptocurrency has reached the sky this year. Cryptocurrency remains a hot topic not only among experienced investors but among newcomers to the industry, thanks to everyone from Elon Musk to that kid from your college who has suddenly blown up as a crypto tycoon.  

“In many ways, 2021 has been a breakthrough as there’s tremendous focus and attention paid to cryptocurrency,” says Dave Abner, CEO of global development at Gemini, a popular crypto exchange. 

This time the writers’ team of the brokerage platform that offers mt5 download for pc tried to find out why you should pay attention to Crypto for the rest of 2021 and the years to come.  

Crypto market situation in 2021 and Cryptocurrency Regulation

Most crypto investors would very much welcome clear Regulation. Regulation probably makes one of the immense overhangs in the global crypto market. So, from now on, we may expect conversations about the crypto market finally getting regulated to continue as lawmakers worldwide are striving to establish rules and guidelines to make e-currency safe for investors and less tempting for cybercriminals. 

However, Regulation tends to come with hurdles. For instance, China announced that all transactions in Cryptocurrency are illegal nationwide, decisively putting a halt to any crypto-related operations within its borders. 

In the U.S., things appear to be less clear, though, since U.S. companies and individual investors are operating without distinct guidelines at the moment. With that, Federal Reserve Chair Jerome Powell recently noted that he does not intend to ban Cryptocurrency in the U.S. With that, recently proposed legislation would make it easier for the IRS to detect tax evasion cases regarding Cryptocurrency. However, crypto investors should keep track of any significant gains or losses on their cryptocurrency assets. Still, the new directives might also make it much more convenient for customers to report cryptocurrency transactions properly. And if the bill passes, crypto exchanges will be required to issue 1099-B tax forms with cost basis information to their customers, significantly reducing the crypto tax filing burden.

A clear regulatory policy can also influence the price of Crypto in volatile markets. The point is, market volatility is precisely why financial experts recommend limiting any investments in Crypto to less than 5% of your portfolio and avoiding investing anything you are not OK with losing. 

Eventually, many experts are convinced that Regulation is the right solution for the crypto industry. “Sensible regulation is a win for everyone,” says Ben Weiss, co-founder and CEO of CoinFlip, a crypto buying platform. “It gives people more confidence in crypto, but I think it’s something we have to take our time on, and we have to get it right.”

Crypto ETF Approval

We’ve already witnessed a breakthrough on this front, as the first Bitcoin ETF has recently made its debut on the New York Stock Exchange. It represents a brand new and more conventional way to invest in Cryptocurrency. The BITO Bitcoin ETF allows customers to purchase Cryptocurrency directly from traditional investment brokerage platforms they already have signed up for, such as Fidelity or Vanguard. SEC has considered the approval of ETF multiple times over the past few years, yet BITO is the first to gain approval eventually.

It might be hard to tell how many investors will go for BITO — still the fund did see quite a dynamic trading action in its first week. Generally speaking, the more accessible crypto assets are within conventional investment products, the more people could invest in and influence the market. Thus, you can add Crypto to your portfolio directly from the same brokerage platform instead of navigating through a cryptocurrency exchange to trade your digital assets. 

Nevertheless, some say the BITO ETF may not be enough since the fund doesn’t hold the Crypto directly while linked to Bitcoin. What it holds, though, are Bitcoin futures contracts. Although those futures follow the general trends of the actual Bitcoin, experts say it may not track BTC’s price directly. For now, investors should wait for an ETF that will hold Bitcoin directly.  

What’s more, investing in a crypto ETF, like BITO, is known to carry the same risk as any other crypto investment, being a volatile and speculative investment. Therefore, if you’re not willing to lose the funds you put into Crypto, as you buy on an exchange, then you probably should stay away from putting it in a crypto fund. Before dealing with cryptos, carefully consider whether taking on the risk of having Cryptocurrency in your portfolio is OK for you.

Top crypto market analysts to follow 

For a better perspective, here’re some thoughts on Crypto from popular personal finance influencers. 

#1 Jeremy Schneider of Personal Finance Club

Schneider has been familiar with the world of Cryptocurrency since Bitcoin’s early days. Today, he stands against letting FOMO pressure people to make their investment decisions, constantly reminding them about two fundamental principles of building long-term wealth: living below your means and investing early and often.

Expert opinion: “Crypto stands in stark contrast to the things I invest in: stocks, bonds, and real estate. Those asset classes are productive because they pay me just for owning them. The longer I own them, the more money they produce, which I can reinvest to create that compound/exponential growth. I see Crypto the same way I see commodities or currencies. As a store of value and a speculative bet that someone will pay more in the future. Historically, commodities and currencies get crushed by productive assets.‎” 

#2 Marc Russell of Betterwallet

Like some others, Russell warns crypto investors of getting swept up in the emotional rush of getting in on Cryptocurrency without doing proper diligence. His philosophy as an investor is to stick to the basics, mainly focusing on long-term strategies. Nevertheless, Russell acknowledges Crypto certainly has a place in a longer-term plan. He recommends allocating 5% to 10% of your portfolio to Cryptocurrency. 

The expert’s opinion: “My best recommendation is that you learn the basics before you start investing! People don’t understand the other side of the spectrum, where you can make 50% on your investment, but you can also lose 50%. They think you’re either making 50% or you’re making 30%, and it doesn’t work that way. But for those being educated on the market and knowing what’s at risk, it’s an excellent diversifier because it’s not correlated to the stock market for the most part. And when you’re looking for something to diversify you, that’s essential to understand what you’re looking for.”

#3 Kiana Danial of Invest Diva

Danial started exploring crypto markets in 2016, having made her first investment in Cryptocurrency in late 2018. She now runs an Instagram account called @InvestDiva, where she shares her thoughts concerning investing goals and buying Cryptocurrency.

Expert opinion: “Are you buying it because you want a lottery ticket to make a million dollars in a year?” Danial asks. If that’s the case, “then you might want to reconsider your investment strategy because some people have gotten lucky, but a majority of people have gotten burned. But if you’ve done your research and are OK with the risk, Danial says it might make sense for investors who still have a lot of time before retirement to allocate as much as 20% of their portfolio to Crypto. But please don’t invest in cryptocurrencies based on trends on Twitter.”

#4 Humphrey Yang of Humphrey Talks

Humphrey Yang gives his financial advice going viral on YouTube and, more recently, TikTok. Being a believer in index funds, Yang thinks that Cryptocurrency makes a somewhat speculative investment. He recommends putting anywhere from 5% to 15% of your portfolio, an amount he claims does limit your exposure on times when the market is falling. Yang also prefers to stick with two of the most popular cryptocurrencies right now. 

Expert opinion: “I don’t really believe in too many altcoins. I do prefer Bitcoin and Ethereum because they’re the two most stable ones and have the most history.”

Other crypto influencers to check out: 

#5 Notsofast

Having been around since the inception of Crypto, Notsofast brings along a vast abundance of educational content and his own commentary on Cryptocurrency across his YouTube channel and Twitter. He has become a prolific commenter on both Bitcoin and Ethereum and niche cryptocurrencies like Parkbyte, being at the same time an Altcoin miner himself. 

#6 PlanB

If you’re looking to follow a blockchain and crypto influencer who knows his stuff well, then PlanB is your plan A. The crypto enthusiast draws much of his two-decade-long experience as an institutional investment expert before moving to cryptocurrencies and becoming one of its most notorious advocates. He also used to popularize BTC’s Stock-to-Flow price prediction model, which has proven to be genuinely accurate.

#7 Fred Ehrsam

The co-founded of the largest U.S. crypto brokerage, Coinbase, Ehrsam turned his sights to e-currencies and the blockchain over a decade ago, still remaining very optimistic about the future of Cryptocurrency, as he states that “we’re watching crypto just getting started.” As every other crypto influencer, Ehrsam is very active on Twitter.

If you’re into technical analysis day trading, then Josh Olswzewics aka CarpeNoctom is the one to consider following on social media. Being a self-taught trader, Olszewicz first stumbled upon the world of Crypto by chance on Reddit, invested in his first e-currency in 2013, and predicted that Bitcoin would hit $33k by July of 2018. Josh is known to post relevant information pertaining to current happenings, financial news, and trading tips on his Twitter account.

Crypto market predictions for 2022 

While the crypto industry is only in its infancy and gradually evolving, it is rather difficult to predict where things are headed in the long run, yet in the coming months, experts are following the path of Regulation and institutional adoption of crypto payments to get a better sense of the market. 

Although exact predictions are impossible to be made, we can speculate on what value existing cryptocurrencies may have in store for crypto enthusiasts in the coming months (and many definitely will). However, the reality is it’s still an unstable and speculative field, without much backstory to base predictions on. Though it is important to keep yourself posted on what financial experts say, no one really knows for sure. That’s why you should only invest what you’re prepared to lose, while sticking to more traditional investments for long-term wealth building. 

“If you were to wake one morning to find that the developed nations have banned crypto and it became worthless, would you be OK?” wonders Frederick Stanield, a CFP with Lifewater Wealth Management in Atlanta, Georgia. 

Anyway, always be sure to keep your investments rational and never put investing in Crypto above any other financial goals of yours, like paying off high-interest debt, maintaining an emergency fund, or saving for retirement.