Bitcoin’s unstoppable rise finally came to a halt in November. At the end of 2020, the cryptocurrency began to skyrocket, multiplying its value by six to exceed $60,000. After a fall of 50%, it again broke highs by placing itself above the $68,000. Everything pointed to the fact that it would soon break the $100,000 mark, but so far this has not been the case. will it happen in 2022?
$100,000 it is just a number. However, many of bitcoin’s successes have attracted attention by reaching round figures such as $1,000, $10,000, $20,000 or $60,000. When McAfee said that bitcoin would hit $100,000 and eat his… ahem, that, if he didn’t, it seems he just got the date wrong.
The bitcoin is right now quite away from $100,000where should grow 260% to reach that figure, and exceed the 1.9 trillion capitalizationa figure similar to what Alphabet (Google) capitalizes on the stock market.
reasons not to believe
The key for bitcoin to continue to rise is, oddly enough, the United States Federal Reserve. Although cryptocurrencies are a decentralized market, their movements are increasingly dependent on those of the stock market, as we have seen in recent months. Thus, if the stock market goes up, cryptocurrencies usually also go up.
The Federal Reserve determines the dollar interest rate. If they raise them, then they will seek to slightly slow down the economy, which will not be well received by the stock market. However, if interest rates are not raised, inflation will continue to run rampant. The increase in inflation in recent months has been one of the reasons why the stock market and cryptocurrencies have fallen.
Now if the Federal Reserve raises interest ratesthere will be one decreased liquidity. Since the pandemic, banknotes have been printed like there is no tomorrow, and some of that money has ended up in the stock market and cryptocurrencies. Without that large amount of capital in circulation, assets like bitcoin run out of gas as there is no “cheap money” to inject, and bitcoin needs just over $1 trillion to reach the $100,000 figure.
Added to this is the fact that cryptocurrencies already have little margin to generate exponential profits. Nobody is going to hit a ball investing in bitcoin, as doubling income can take a year or more, and may not even come. Much of the attention has been taken now NFTs, where doubling income is something that can be achieved in days. Thus, oddly enough, bitcoin has become a conservative asset.
reasons to believe
However, even though a rise in interest rates would not help bitcoin to grow, if the economy grows and income continues to rise of companies and investors, it is possible that we will see a significant rise in the cryptocurrency market. To this is added that the returns of the dollar are lower than that of the increases in the raw Materialsso there are those who can search return on other securities. Bitcoin could break its high again this year, and get closer to that $100,000. It is only necessary to have patience between so much volatility.
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