The value of Bitcoin (BTC) has almost doubled in 2021, although it remains only one month before the new year. However, it was a wild ride to get there. After a big surge last winter, the price of the original cryptocurrency was halved over the summer, only to recover all-time highs again in the fall.
But with the new variant of the Omicron coronavirus sending investment markets into turmoil again, the arbitrary but long-awaited milestone of $ 100.000 in Bitcoin (74% above the current price at the time of this writing) is still a lot. far away at this point and it seems unlikely to be reached in 2021.
But cryptocurrency prices are volatile, both on the downside and on the upside. It is possible that Bitcoin could hit the $ 100.000 mark in 2022. Here's how it could happen.
Three catalysts to drive Bitcoin high
Bitcoin has enjoyed first mover status since it was launched in 2009, six years before what is now the world's second largest cryptocurrency by market capitalization, Ethereum (ETH). With a market capitalization of over $ 1 trillion, Bitcoin also sits atop the crowded cryptocurrency field and has garnered many users from both individual and institutional investors.
But because it's a scarce type of resource (nearly 18,9 million coins have currently been mined, out of a long-term high of 21 million coins), Bitcoin could rise as demand increases. Here are three catalysts that could take it to $ 100.000 next year:
- Bitcoin is seen as a store of value if inflation persists.
- Adoption spreads among companies, institutional investors and sovereign nations.
- Increased adoption of the Bitcoin network as a decentralized finance (DeFi) solution after the Taproot update.
Should you invest in Bitcoin for 2022?
What I'm not saying here is that you should buy Bitcoins. Investing in cryptocurrencies of any kind, including the block's original and largest token, isn't for everyone. Even if Bitcoin does hit $ 100.000 in 2022, it will be a wild ride. If you invest in this volatile space, keep those bets a small percentage of your total investable net worth.
And if you decide to replace any cash position in your investment portfolio with Bitcoin, don't use all of your dollars. Inflation consumes your purchasing power over time, but money has its merits. It does not fluctuate in value like cryptocurrencies do, and having some cash lying around offers the opportunity to buy on the inevitable drops in investment values.
However, Bitcoin is attracting interest from all kinds of large organizations around the world, and a higher rally in 2022 is entirely possible. If you are interested in investing in cryptocurrencies, Bitcoin is a great place to start.
