Predictions for 2022

As usual, I avoid unquantifiable predictions. For example, these are all vague predictions for 2022:

• Emerging COVID-19 variants will jeopardize our return to normalcy
• Interest rate hikes wreak havoc in our debt-heavy world
• The global supply chain continues to strain due to unforeseen events and sky-high costs
• Geopolitical tensions cause jitters in the global markets

If you can’t measure it, it can be hard to definitely say if you’re right or wrong.

Here we go:

1. Bitcoin ends 2022 at $75,000. 

Four years ago, I began making annual predictions on bitcoin’s price. I’ve been correct every time; twice within a couple of percentage points.

In 2022, I’ll make a video that explains my prediction methodology. 

I’ll be the first one to admit that luck is a huge factor. I know that one day I will be spectacularly wrong. I’m surprised that I have lasted 4 years and not been horribly wrong. Maybe my luck will run out in 2022.

I’m predicting that bitcoin will be at $75,000 on December 31, 2022. 

Bitcoin’s price will be volatile, as usual.  I predict that BTC’s price will trade between $40,000 and $140,000, although I would not be surprised if it does not crack $100,000 like everyone expects it will. And if it does, it won’t stay up above $100,000 for months.

I predict a BTC Spot ETF will become available in the USA. It will cause a parabolic rally and a few weeks later, it will deflate.

Increased interest rates will make people sell BTC for two reasons.

1. They will flock to less risky assets.

2. The DXY (USD Index) will increase when interests rates increase, and that’s usually bad for BTC.

2. Inflation will reach 10%.

The Consumer Price Index (CPI) measures inflation. As flawed as it is, it’s the “official” inflation number. At the end of 2021, it’s about 6%.

I predict that we’ll have one month in 2022 that will hit nearly 1% inflation (perhaps 0.9%). Annualized, that means we’ll have an inflation rate of around 10%.

3. The Fed Funds Rate will quadruple 

It’s currently less than 0.25%.

They will have to raise it dramatically to slow inflation.

4. S&P 500 loses 5%

Ever since 2018, US stocks have done well. Even the Coronapocolypse could not stop the S&P from gaining 18% in 2020!

The bonanza will finally take a pause in 2022.

The S&P will close below 4500.

Why?

• The US Fed will have to raise interest rates to stop inflation.
• The Coronavirus will continue to plague humanity (the Spanish flu killed 100 million and with all the unvaccinated, we will get more carnage).
• China tumbles into a recession.
•  Russia and/or China could rattle their sabers, which could spook the market.

5. The James Webb Telescope delivers sharp images

On Xmas 2021, the James Webb Telescope successfully launched, but we won’t know until 2H 2022 whether it will deliver the sharp images that it promised.

It could easily have similar problems as the Hubble Telescope had.

The problem is that it’s almost impossible to repair the Webb Telescope because it’s 1 million miles away (Hubble was much closer).

So we’ll be screwed if Webb fails, but I’m betting that it will live up to its expectations.

6. No flippening

Ethereum’s market cap will not exceed bitcoin’s in 2022, but it will get close!

7. Ethereum ends 2022 at $5,000 due to a disappointing 2.0 execution

Etherum 2.0 will launch in 2022, but it will be plagued with technical problems and disappointment.

Its proof-of-stake and layer-2 tech will function, but throughput will underwhelm and security patches will happen every month as hackers exploit the system.

Just like Bitcoin will peak with the ETF, Ethereum will peak with its 2.0 launch. 

8. Plan B will continue to tout his stock-to-flow model

Although Plan B repeatedly said that his doomed stock-to-flow bitcoin model will be invalidated if it fails to hit $100,000 in 2021, he changed his tune when a few weeks remained in 2021.

I predict that he will continue to refuse to admit that his model has failed.

Instead, he will observe that as long as the bitcoin price is above $30,000, all is well since it still can get well above $100,000 before May 2024, when the next bitcoin halving happens. 

He won’t admit that his model is busted until 2025 when BTC will drop below the second standard deviation band.

Previous predictions

To see my previous forecasts check out my predictions in 2018, 2019, 2020, and 2021.