Will Bitcoin rally to hit a new ATH of $75k in 2022?
Bitcoin will rally from the latest cryptocurrency crash to hit a new record high of $75,000 by the end of this year.
That’s my latest prediction, even as Bitcoin’s price declined under the $40k mark a number of times on Monday, impacting the wider crypto sector.
The total crypto market is down $1.89 trillion currently, an 11% fall compared to last week.
What we’ve seen is Bitcoin briefly falling under $40,000, tracking losses in global equities. The correlation with stocks markets is particularly prevalent at the moment with the tech-heavy Nasdaq 100 index, which is in tandem more than ever before.
It would appear that investors are lessening their exposure to risk-on assets, including crypto and stocks, due to mounting worries over inflation and an economic growth slowdown.
There’s an increasing sense that central banks, including the Bank of England, European Central Bank and United States Federal Reserve, will not be able to curb inflation without triggering a recession.
As it stands, Bitcoin is seen as a risk asset, alongside equities, yet this could all change as the largest crypto’s characteristics haven’t altered.
With red-hot inflation set to continue within the coming months, the BTC price will be bolstered as investors seek to safeguard their purchasing power by moving away from cash and into store of value investments.
To my mind, there are three principal reasons why Bitcoin is regarded as a credible hedge against inflation. First, its limited supply. With just 21 million available, higher demand will drive prices up. Second, accessibility – it has value as an asset and is accepted by the market. And third, durability. Bitcoin will keep drawing more demand in future.
We’ve also seen crypto’s other intrinsic values laid bare during the geopolitical issues over the last few weeks, such as being a viable decentralised, tamper-proof, unconfiscatable monetary system.
As such, I believe the case is now even stronger for Bitcoin and crypto. This is why we expect Bitcoin to recover from the current crash to hit a new all-time high of $75,000 by the end of 2022.
Consequently, so-called ‘whales’ – who hold 1,000 or more BTC – will be rebuffing the concerns about the price dips and using them as buying opportunities.