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“Bitcoin appears to be on a trajectory for $100,000,” states a Bloomberg Intelligence report that sees the crypto market strengthening by 2022 as monetary stimulus ends and digital tokens begin to be regulated.
Bloomberg analysts say Bitcoin is on track to become an effective — but gradual — store of value as the cryptocurrency manages to decrease its volatility.
As more institutional investors and ordinary people enter Bitcoin, the volatility, which has traditionally characterized crypto, will tend to decrease.
End of FED’s money printing will boost cryptocurrencies over other assets
Because of the Fed’s decision to prematurely tighten its monetary policy to prevent inflation from spiraling out of control, Bloomberg expects financial markets to feel the lack of liquidity and have lower returns in 2022 relative to the astronomical valuations seen in 2020 and 2021.
Declining yields on bonds and other financial assets could attract capital seeking higher returns to cryptocurrencies, so Bitcoin could be the main beneficiary of lower returns in the traditional financial market.
Bloomberg sees the entry of new regulations to the cryptocurrency market as positive
On several occasions, the chairman of the Securities and Exchange Commission (SEC), Gary Gensler, has commented on the need to regulate cryptocurrencies and financial products derived from them. The current dilemma with the SEC has caused the postponing of numerous cryptocurrencies. eToro even opted to stop trading some cryptos on its platform.
On the part of the FED, it is considered necessary to regulate stablecoins, cryptocurrencies whose value is tied to assets such as the dollar and which seek to maintain a stable value in the market. In the eyes of central banks, stablecoins are in direct competition with state digital currencies, which are already issued in China and are being studied in the U.S., EU, and India.
Bloomberg interprets the upcoming regulation as a positive event for cryptocurrencies that will bring confidence to the markets about digital assets and will impact the price positively in 2022.
Tether, Bitcoin and Ether are the most traded cryptocurrencies in the market according to Bloomberg
Surprisingly, the most traded cryptocurrency in the market is Tether, the stablecoin that is at par with the dollar. The reason lies in the fact that cryptocurrency traders usually buy this type of asset to take refuge from the volatility of cryptos such as Bitcoin in the hours when they are not trading. In other words, Tether is the largest store of value in the crypto market.
Bitcoin comes in second place. In 2021, it was overshadowed by the high prices of other cryptocurrencies such as Solano or Ada, which reached valuations of over 800%.
In third place is Ether, the cryptocurrency of the Ethereum blockchain. After the emergence of Bitcoin in 2020, Ether followed suit and reached $4,800 on the market in November 2021, despite only surpassing $1,000 in January of the same year.
Bloomberg expects Ether’s adoption to continue to rise in the stock market and that more institutional players who have only invested in Bitcoin will soon consider other cryptocurrencies for investment.
Bloomberg considers Bitcoin more than digital gold
“A potential path for the Bitcoin price is to stabilize around 100x an ounce of gold,” the Bloomberg report states.
According to the portal, the reduction in Bitcoin’s volatility along with the decrease in cryptocurrency tokens circulating in the market could lead to a sustained appreciation in the coming years.
“Something unexpected has to trip up this technical indicator, we believe, with fundamental underpinnings for Bitcoin holding fast on the appreciation path versus gold,” reads Bloomberg Intelligence research.
Economist, writer and liberal. With a focus on finance, the war on drugs, history, and geopolitics // Economista, escritor y liberal. Con enfoque en finanzas, guerra contra las drogas, historia y geopolítica