For months, I've talked about Kyle Langham's prediction of $17 USD ICP during the first half of 2022. Up until last week, his prediction had lost some popular support due to a recent ICP price spike. Nevertheless, I was convinced by his thorough technical analysis of supply and demand and network usage. Therefore, I forecasted that short-term bullish ICP price projections were unsubstantiated.
I was correct.
On January 22nd at 4:10 AM CST, the ICP price dropped to $18.11 USD. And in my opinion, this crash is only the beginning. Massive amounts of ICP are about to inundate the market, offsetting growing demand for the Internet Computer with excessive supply at a time when all cryptocurrencies are depreciating in value.
What comes next?
A Triple Black Swan Event
The market doesn’t exist in a vacuum. Price forecasts must account for the impact of geopolitical events, and not everything is easily reducible to tables and graphs. For example, the COVID-19 pandemic tanked the stock market overnight, creating an ideal entry opportunity for new investors.
Russia’s proposed ban on the use and mining of cryptocurrencies is another occurrence of what’s called a black swan event. This term was popularized by Nassim Taleb in his book, The Black Swan. These rare, unpredictable events defy expectations and have severe consequences. Unfortunately, Russia's most recent black swan event could be particularly bad news for cryptocurrency.
Why? Because in actuality, it's part of a larger, unfolding, triple black swan event.
- Increasing regional bans on cryptocurrency.
- The likely outbreak of war in Ukraine.
- Fed increasing interest rate.
This is not alarmism. This is realism. All bets are off on cryptocurrency price predictions in the event of a regional or global war. Even the threat of such a conflict during the first half of 2022 could send ICP prices tumbling significantly below Kyle Langham’s prediction of $17 USD. In a worst-case scenario, it would not surprise me to see $10 USD ICP at some point.
At the time of writing (January 22, 2022), Solana has already fallen below $100 USD, Ethereum is poised to half its December 23rd value, and Bitcoin is well on its way to dip below $30,000 USD in the near future. We appear to be entering a new cryptocurrency winter analogous to the infamous 1929 stock market crash.
In the long term, though, escalating international tensions could spark innovation and an accelerated adoption of decentralized technologies. Centralized systems are notoriously vulnerable to attack, including the US power grid, which in theory at least could be impaired by a few well-placed rifle shots in select power station hubs.
Every Star Wars fan is familiar with the "thermal exhaust port principle" — any system that is not intentionally redundant and decentralized has an Achilles heel. Active warfare would likely reveal an unprecedented number of single regional points of failure in our Internet infrastructure.
Going forward, speculators should take note and de-emphasize the importance ascribed to daily trading volumes and crest and trough patterns in prices. Most of what gets posted online about double tops, double bottoms, support levels, and so on is about as reliable as reading tea leaves.
Instead, investors should focus on the fundamental promise and functionality of new technologies like the Internet Computer, which like the original architecture of the Internet, is designed to withstand a nuclear war. Moreover, investors should consider the potential demand for robust, decentralized Internet infrastructure in the context of active warfare and a growing awareness of the problem of single points of failure.
If you support the vision of the Internet Computer, now may be an opportune time to invest. Fearful, uncertain eras are when the future’s seeds get sown.
Next Week's Price Prediction
Next week's ICP prices will most likely continue to decline in view of geopolitical uncertainties.
- High - $25 USD per ICP.
- Typical - $20 USD per ICP.
- Low - $15 USD per ICP.
For those of you who appreciate a more detailed daily prediction, here's your nine-day forecast using the AAA version of the Exponential Smoothing (ETS) algorithm on the past 90 days of ICP price data, accounting for seasonality.
Please note that in view of geopolitical events and broader trends in the cryptocurrency market, I regard this forecast as naively optimistic. In other words, the forecast is blissfully unaware of current events fueling market crises. Thus, my instinct is that it's a few dollars too high in its projections.
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