Bitcoin to hit $ 100,000 in 2022: report

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Although it has fallen nearly 30% since its all-time high in November, Bitcoin is in a consolidating bull market and on the way to $ 100,000, according to a Bloomberg Intelligence report. The newspaper said that the BTC bull run is unlikely to have stopped and predicted that the fixed supply will support the price increase.

“The key question that Bitcoin faces as we approach the start of 2022 is whether this is a peak or just a consolidating bull market,” the report states. “We believe it is the latter and see the benchmark crypto on its way to becoming a global digital collateral in a world that goes this way.”

The report also highlighted how this year’s corrections made the asset stronger and its bull market healthier, as Bitcoin endured and surpassed China’s mining ban to new highs. In addition to surpassing previous highs to hit $ 69,000 in November, the Bitcoin network’s hash rate also recently hit a new all-time high, demonstrating a deep resilience of its consensus protocol.

“Bitcoin appears to be on a $ 100,000 path. We see this more as a matter of time, especially given the economic fundamentals of increasing demand versus decreasing supply,” the report said.

Wider mainstream adoption will lead to increased demand for bitcoin, and the developments of new exchange-traded funds and futures and legal tender status in El Salvador are examples of this process. According to the report, as the issuance of BTC decreases and its awareness increases, prices are expected to rise and volatility decrease.

Greater regulatory clarity in the United States for Bitcoin could also increase its acceptance among certain types of investors and help meet even higher demand for the asset. The report says next year could be pivotal in this direction, as the country appears poised to embrace cryptocurrencies with more detailed legislation and a better understanding of technology from government officials.

Monetary policy could also play its part, especially if the Federal Reserve’s tightening measures end up causing the stock market to collapse, prompting the central bank to move things in the other direction.

“One of the main forces in reversing expectations for the Federal Reserve’s tightening in 2022 is a decline in the stock market, which can be a bit of a win-win for Bitcoin,” the report says, adding that Bitcoin is “in the process”. on track to become a store of digital value.

“Bitcoin will face initial headwinds if the stock market falls, but as falling stock prices put pressure on bond yields and spur more central bank liquidity, crypto may be the one. primary beneficiary, ”according to the report.

The report also mentions the inability of the long-term US Treasury bond to hold above 2% despite a broad consensus for higher yields, a phenomenon that could lead to a deflationary environment next year. favoring Bitcoin.

Source: Bloomberg Intelligence.

Bloomberg Intelligence explained that the funds were moving away from “old analog gold” and heading towards Bitcoin.

“The question for 2022 concerns the reversal or acceleration of these flows. With bond yields falling, our bias is in favor of the latter, ”according to the report.

Bloomberg added that Bitcoin’s fixed supply, imposed by a declining issuance every four years, could help it outperform stocks again next year, giving it an advantage over an extended stock market that has not had a 10% correction since the 2020 crash.

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