The price of Bitcoin took an unexpected bearish turn in January, but are there any catalysts that could support a run to $100,000 in 2022?
The internet is filled with Bitcoin (BTC) price forecasts. For example, some analysts believe that the flagship crypto will hit $1 million per coin in the next ten years, while others think BTC price will eventually drop to zero. Without dwelling on predictions that are five or more years ahead of us, let us focus on what Bitcoin could do, say, in the next six months?
Again, the forecasts vary drastically. For instance, Antoni Trenchev, the founder of Nexo Finance, sees Bitcoin price hitting $100,000 by mid-2022. On the other end of the spectrum is Sussex University professor Carol Alexander, who thinks Bitcoin price could drop to as low as $10,000, thereby wiping out all the gains it had made in 2021.
Bitcoin has been trending almost in the middle of these two extremely far predictions, and at press time, the cost to purchase one BTC is close to $36,500 at Coinbase. In addition, Bitcoin’s circulation will increase on an average of 6.25 BTC per 10 minutes until the next halving in early 2024. This means miners will produce about 900 BTC every day. As a result, by the end of June 2022, there will be 162,900 BTC created into the year.
This would push the total Bitcoin supply in circulation to about 19.078 million BTC. If BTC’s price is $100,000 by then, its total market capitalization would be nearly $2 trillion, up 128.50% from the year’s opening valuation near $875 billion. Conversely, a drop to $10,000 would push the Bitcoin market capitalization of the total circulated tokens down to over $190 billion, down $685 billion, or about 78%, from this year’s open.
Studying Various Predictions about Bitcoin Prices Continues
So the biggest question that comes to mind after looking at these mind-boggling predictions is whether it is even possible for Bitcoin to move violently towards either of the targets mentioned above. In my opinion, the answer is a BIG YES, mainly because BTC price has been notoriously volatile in the past.
One question to consider is whether or not investors are ready to inject almost a trillion dollars into the Bitcoin market across the next six months? Trenchev believes they may because of the “cheap money.”
Sovereign Devaluation of Currency Still Is a Very Big Catalyst
A popular economic indicator, dubbed as the “U.S. dollar index,” measures the greenback’s strength against a weighted basket of six foreign currencies — the Euro (EUR), Japanese Yen (JPY), Pound Sterling (GBP), Canadian Dollar (CAD), Swedish Krona (SEK), and Swiss Franc (CHF) — surged over 7% to 96.22 last year. It’s also worth noticing that the dollar’s valuation has surged only against fiat currencies, but against commodities, the greenback has been losing battle after battle.
For instance, a recent U.S. Bureau of Labor Statistics report indicates that consumers paid 7% higher for everyday items in December 2021 than they did 12 months ago. In other words, the inflation in the world’s largest economy has risen to levels never seen before 1982.
Also Read : Analysts Predict The Bounce Of Bitcoin At $36K Means Its Time To Think About A Bottom
This shows the dollar is the best weak boxer in a ring competing with the six weakest boxers. Sure, the greenback has been winning rounds against them all, but it has also been running away from the real competition.
In the six-month timeframe chart above, one can see that there has not been a single instance wherein the Bitcoin market capitalization had risen by over $1 trillion. Similarly, there also has not been a single case where Bitcoin’s market valuation dropped by more than $190 billion in six months, as required in the event of a BTC price drop to $10,000. Despite not rising or falling drastically, the Bitcoin market — as per historical data — attracts more capital in that it spits out, indicating why its price per unit has rallied by more than 14,250% to date since January 2014.