Will Bitcoin Hit $100,000 in 2022?

bitcoin

Bitcoin’s price fluctuation has been a trending topic since we stepped into 2022. We can attribute this to the currency’s largely excellent performance during the pandemic, clocking more than a 60% price increase in 2021. Despite Bitcoin being far off its record high of around $65,000 earlier that year.

For the world’s largest cryptocurrency by market cap, price fluctuations and changes in valuations are normal as long as they don’t impact the trading activity negatively. According to data from Coin Metrics, Bitcoin is currently trading at $42,821.02 as of 7:44 pm UTC on January 12th, 2022. However, even with this price decline, Bitcoin is still twice as valuable as it was a few years ago.

Is Bitcoin Poised for a Better 2022?

Bitcoin’s recent price valuation has experienced a slump since its remarkable performance in 2021. Unlike the last two years, which were easy to predict the currency’s valuation, the decline in the pandemic and subsequent slowdown in user interest are all playing a role in Bitcoin’s current valuation.

This susceptibility to market factors is one of the key reasons many are reluctant to endorse Bitcoin’s big boom this year. However, price volatility is nothing new to Bitcoin. Since its introduction, the currency has experienced numerous rallies and crashes more than any other crypto.

Bitcoin’s first price increase was a decade ago when the value of a single Bitcoin jumped from almost nothing to $0.09. Since then, Bitcoin has shown a steady valuation, with many trading experts arguing the currency may be on its way to surpassing the $100,000 mark in 2022. This will be the first time for the cryptocurrency to surpass its all-time high of more than $68,000.

Key Factors That’ll Drive Bitcoin’s Price Upsurge in 2022

Recent statistics on the Cryptocurrency market capitalization reveal that the industry has surpassed the $1 trillion mark. Bitcoin’s recent bull run is fueling this market growth with the currency responsible for more than 70% of this total cryptocurrency market cap.

Overall demand for Bitcoin is rising as people acquire them to facilitate secure transactions on-chain. Many industries, including the online gaming industry, have started embracing the currency to tap into its huge benefits. Players can now make safe deposits and withdrawals using Bitcoins, whether playing in Dunder Casino or a specific Bitcoin site of choice.

With Bitcoin rapidly transforming from a speculative asset into a store of value, we expect a significant impact on its overall valuation from the rest of the crypto market. As such, it’s only reasonable we remain curious about how high its value will hit in 2022. Whether Bitcoin attains the $100,000 ceiling or not, these key factors will have a bigger influence.

Bitcoin Shortage

Bitcoin’s price valuation follows the demand and supply principle. Together, these two factors greatly impact the market price and the volume of Bitcoin circulation. The current protocol allows for Bitcoin creation at a fixed rate. This is intended to slow over time in a process known as Bitcoin halving.

Bitcoin halving is an essential practice that happens every four years. Due to the current Bitcoin shortage, we’ve already completed its third halving this year. The halving process has allowed traders to be introduced to new coins through Bitcoin mining. This may prove quite profitable and subsequently drive Bitcoin’s valuation higher.

Bitcoin creators designed the cryptocurrency to have a market cap of 21 million BTC. Once the cap is attained, miners won’t receive new BTC access to verify transactions.

Institutional Acceptance

Bitcoin acceptance by many institutions across the world is growing daily. Many companies now want to leverage the currency’s security for protection against inflation and market volatility. Some see Bitcoin as a valuable asset and want to get hold of it before the currency attains its market cap.

Besides, Bitcoin is hugely viewed as a store of high value. Large corporations such as Tesla have built huge trust in Bitcoin, further propelling its prospects as the future currency. These factors point to a possible increase in the currency’s valuation fueled by the growing number of users.

Improved Understanding of the Currency

Ten years ago, Bitcoin had a low valuation because few people understood what the currency stood for. However, the increased understanding and the current regulatory clarity about the cryptocurrency world may drive Bitcoin’s adoption.

Today, Bitcoin is fully accepted in El Salvador as legal tender. We expect to see more countries following suit and sharpening the adoption curve. The extensive increase in investor interest in Bitcoin during 2021 is also a factor that may drive Bitcoin’s valuation higher.

Increased Coverage

Aggressive Bitcoin advertising campaigns are now a new norm. The positive media attention to cryptocurrencies as safe and secure currencies is a key factor in Bitcoin’s high valuation in 2022. This gives people a clear understanding of Bitcoin’s basic functionality, attracting them to the crypto investment idea.

This may influence Bitcoin’s performance in 2022 and the next few years. We may as well see the currency surpass that $100,000 valuation.

Bottom Line

With digital assets now going mainstream, cryptocurrencies like Bitcoin are the biggest beneficiaries. It’s safe to say that it’s only a matter of time before we experience an influx of Bitcoin miners and people interested in crypto investment. However, Bitcoin is still susceptible to competition and the threat of substitutes on the global cryptocurrency market.

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