Search
Close this search box.

$100K Bitcoin? Hope & Caution in 2022

Lazerpay
Image source: Lightrocket Via Getty Images

Earlier this week, the bitcoin dipped to as low as $39,558, denting hopes for a big recovery after last week’s crash. The last 72 hours have seen all Cryptos lose a combined $296 million of their market value.

There’s some comforting news however. Bitcoin didn’t dip alone, the stock market was also red all over. The S&P 500, Nasdaq 100 and the Dow Jones are traded around 1.3%, 1.41% and 1.72% respectively, below their closing prices on Friday.

How it Happened

Bitcoin ended 2021 at $46,200 after it crashed by 20% from $57,300 to $45,000 over the first weekend of December 2021 alone. Also, bitcoin has been down nearly 10% since the start of the new year.

For an asset that some Wall Street banks and respected financial analysts expected to hit $100,000 by the end of 2021, bitcoin’s current reality is widely off the mark.

Last week’s crash can be tied to the US Federal Reserve’s (the Fed) meeting minutes for December which revealedthat the Fed would raise interest rates earlier than expected.

For traditional investors, the draw to bitcoin was the prospect for quick capital appreciation after the global low-interest rates had discouraged investments in stable investments such as bonds. With the expected interest rate hike, investors would now be able to get substantial returns on their investments while being guaranteed capital protection on treasury bonds.

Also Read: Bitcoin: Most Common Myths Busted

China outlawed all cryptocurrency transactions, which was arguably the biggest single regulatory move to cryptocurrency ever. Bitcoin fell about 10% in reaction to the news.

2022 FORECAST

At the time of writing this article, data obtained from investing.com shows that Bitcoin is up by 5.19% today and currently trading at $43,763.9 as inflation data for the U.S rose to 7% in 2021. The inflation figures for December 2021 soared by the most in nearly 40 years, reviving talk of Bitcoin being a hedge against rising prices and this is currently lifting the value of the cryptocurrency in the market.

Ad Banner

Last year, the forecast by U.S based analysts placed bitcoin value within the $100,000 bracket by the end of 2021, or in the first quarter of 2022. Now, a leading investment bank – Goldman Sachs now expects bitcoin to hit the $100,000 mark within 5 years.

Carol Alexander, professor of finance at Sussex University, seems more pessimistic about the outlook for bitcoin as she expects the crypto asset to dip as low as $10,000 this year. As more predictions begin to flood the market as we experienced with the $100,000 forecast, we expect that players in the cryptocurrency space will apply a more cautious approach to investing and trading this year.

Share this article

Receive the latest news

Subscribe To Our Newsletter

Get notified about new articles

window.addEventListener('load', function() { var script = document.createElement('script'); script.src = 'https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js'; document.head.appendChild(script); });