Despite continuing increases in circulating tokens, the ICP price has stabilized over the past week (December 24th - 31st, 2021) at an average price of about $25 USD. This is due to steadily intensifying demand from an expanding NFT marketplace (including projects like ICP Art) and encouraging network developments such as the opening of Terabethia, the Internet Computer's new Ethereum bridge.
But will these factors be enough to avoid falling ICP prices in January 2022?
Keep reading to find out!
Terabethia and Bitcoin Integration
Terabethia is a game-changer. Ethereum ERC-20 tokens and assets can now natively exist on the Internet Computer. In the long run, this will help circumvent Ethereum's substantial gas fees and offer a feasible blockchain storage solution that doesn't depend on commercial Web services like Amazon or Google Cloud.
Over time, users of Terabethia will also begin to realize the advantages of the Internet Computer over its competitors, including high speed, low cost, and eco-friendly infrastructure. Not to mention, Bitcoin integration is right around the corner. Soon, Bitcoin, Ethereum, and ICP could emerge as a potent cryptocurrency triad.
Projects like Terabethia and upcoming Bitcoin integration are wildcards when it comes to predicting impacts on ICP demand and price. However, I tend to agree with Kyle Langham that it will take time for these innovations to gain traction. Many people have not yet heard about the Internet Computer.
Other people have misunderstandings and misgivings regarding the DFINITY Foundation due to ICP's dramatic price fluctuation during its debut. Thus, at the earliest, late 2022 is when I expect we'll witness mainstream use of the Internet Computer as a Layer 2 or secondary framework to enhance other blockchains. Price impacts will follow.
Impact of Newly Circulating ICP
The amount of ICP that will soon hit the market is known. The NNS is built for both anonymity and transparency, so anyone can look up information about dissolving neurons. In 2021, an average of 2 million ICP became liquid each month. This number will rise to about 6 million ICP per month for the next quarter.
Barring a dramatic increase in demand due to a previously unknown use case for the Internet Computer (nothing's impossible), ICP price seems poised to bottom out at an all-time low sometime before June 2022, at which point burn mechanics and increasing demand will overcome increased supply.
Regarding the bottom price for ICP, Langham's analysis supports an estimate of $17 to $20 USD. However, given bearish trends in the wider cryptocurrency market and conversations about broader federal regulations in the United States, it's not out of the question that ICP price could briefly dip to $10 USD at some point during the first half of 2022.
These low prices will continue to spur the rapid growth of the Internet Computer's ecosystem and set the stage for a future bottleneck in supply in 2023 or 2024. Thus, now is an ideal time for long-term investors to accumulate and stake ICP in the NNS. After June 2022, according to Langham's analysis, it is unlikely ICP will ever again see such low prices.
Next Week's Price Prediction
The factors mentioned above probably won't significantly shift the ICP price for the next week. ICP will likely continue to bounce between $22 and $30 USD.
- High - $30 USD per ICP
- Typical - $25 USD per ICP
- Low - $22 USD per ICP
- NOT FINANCIAL ADVICE
The information and opinions provided by the DFINITY Community should not be understood or construed as financial advice. We are not attorneys, accountants, financial advisors, or fiduciaries. Our speculations and suggestions are not a substitute for financial advise from a professional who is aware of your individual circumstances.
We do our best to provide accurate and valuable information and informed opinions. We also expressly recommend that you seek advice from professionals and will not be held responsible for any consequences of your investment decisions.