5 Bitcoin Investment Themes to Watch in 2022

The celebs seem to be aligning for bitcoin in 2022. Inflation continues to rear its head in the economic system, eroding the buying energy of shoppers, institutional traders have begun to dip their toe into the crypto waters, and mainstream traders are lastly coming round to the thought of a digital forex. Plus blockchain gaming has taking the business by storm, and bitcoin is making its presence in this area of interest identified.

Whereas the main cryptocurrency failed to dwell up to to probably the most formidable worth targets from 2021, it’s nonetheless up 46% for the yr and has a number of potential catalysts that might probably gas the bitcoin worth in 2022.

1.) Inflation

Inflation is at the moment hovering at 6.8%, sending client costs rising at their quickest price in practically 40 years. Whereas buyers proceed to face sticker shock, People are wanting to place their hard-earned financial savings someplace it will not evaporate. That is the issue bitcoin is designed to remedy, thanks to the prescience of bitcoin creator Satoshi Nakamoto, who warned in regards to the rise of inflation again in 2009.

Not like fiat cash, bitcoin isn’t topic to the whims of any central financial institution, whose cash printer has been turned on, plus it has a finite provide of 21 million cash that may ever be mined. Now that inflation has gripped the worldwide economic system, regardless of characterizations of it being “transitory” in nature, traders look to store-of-value property to protect and progress their wealth, and they’re more and more turning to bitcoin over gold.

Whereas the main cryptocurrency is off its peak degree, bitcoin nonetheless superior in 2021 and boasts a market cap of $983 billion. In the meantime, rival store-of-value asset gold really misplaced floor in 2021, falling 3.6% regardless of sky-high inflation. Bitcoin’s positive aspects add insult to harm for gold traders, contemplating gold is designed to be an inflation hedge and failed to do its job of late.

2.) Bullish Value Predictions

If 2021 taught the cryptocurrency neighborhood something it is that no person is aware of precisely what bitcoin, or any crypto for that matter, goes to do. Market specialists had been calling for bitcoin to hit $100,000 in 2021, and bitcoin finally completed the yr beneath $50,000 after peaking at shut to $69,000 in November. Final yr’s surprises however, market prognosticators are putting their bullish bets for 2022.

Amongst them, Fundstrat managing accomplice Tom Lee informed a Market Rebel roundtable that 2022 ought to be a great yr for bitcoin. He factors to the headwinds that bitcoin confronted in 2021, reminiscent of China’s authorities banning bitcoin mining, the method by which the community is secured and new cash are minted. With that unfavorable occasion in the rearview mirror, Lee expects bitcoin not solely to attain the $100,000 degree in 2022 but additionally probably obtain $200,000 per coin,  even when it sounds “fantastical.”

Bitcoin 6-Month Chart | Supply: TradingView


3.) Institutional Adoption

Institutional traders began coming off the sidelines in earnest in 2021, beginning a series response that’s possible to spill over into 2022. Billionaire hedge fund dealer Paul Tudor Jones has thrown his weight behind bitcoin over gold as a hedge towards inflation and believes the flagship crypto is “a good way to defend wealth over the long term.”

One other theme that’s unfolding on is corporations including bitcoin to their treasuries as a substitute of maintaining their property in money. Michael Saylor, CEO of enterprise enterprise firm MicroStrategy, kicked off this development over a yr in the past and has been shopping for extra bitcoin ever since. His firm simply bought 1,914 extra bitcoins earlier than the brand new yr,

As well as to Saylor, different CEOs who’ve caught bitcoin fever for his or her stability sheets embrace Jack Dorsey of funds firm Block (previously often called Sq.) and Tesla’s Elon Musk.

One of many merchandise that institutional traders have been ready for is a bitcoin ETF, and so they acquired their want in 2021. Regulators lastly permitted a bitcoin ETF, the ProShares Bitcoin Technique ETF (BITO). The chief grievance from the bitcoin neighborhood, nonetheless, is that this fund is predicated on bitcoin futures contracts, not the spot market the place traders might achieve direct publicity to the digital asset.

U.S. SEC Commissioner Hester Peirce, who’s affectionately often called “Crypto Mother,” just lately expressed her disbelief to CoinDesk that the market continues to be ready for a bitcoin spot market ETF.  The SEC has bitcoin spot-market ETF purposes on its desk, and with buddies like Peirce in crypto’s nook, there may be at all times the chance that one might see the sunshine of day in 2022.

4.) Mainstream Adoption

Bitcoin acquired nearer to mainstream adoption than ever earlier than when El Salvador revealed that it will make the most important cryptocurrency authorized tender in the Central American nation. El Salvador President Nayib Bukele has additionally unveiled plans to construct a Bitcoin Metropolis, the funds for which he plans to elevate with bitcoin bonds.

President Bukele has been nurturing tech innovation and can place the town close to volcanoes from which the nation can harness geothermal vitality for electrical energy and bitcoin mining. Since El Salvador introduced its plans, different nations like Cuba have made related strikes, which might create a virtuous cycle in the area.

One other development that has emerged is company America on the hunt for crypto and blockchain expertise. Corporations like Amazon are persevering with that hiring development into 2022, with the e-commerce big at the moment wanting to fill a blockchain world observe lead job, amongst different associated positions. Wall Avenue has determined if you cannot beat them, be part of them and has additionally been hiring for crypto-related jobs. Banks are fattening the pay by as a lot as 50% to entice blockchain expertise.

Professional sports activities groups together with the NBA’s Dallas Mavericks settle for bitcoin as a fee methodology, whereas Tesla used to however stopped after Elon Musk took subject with the main crypto’s vitality consumption. Musk stated he’s keen to rethink including help for bitcoin as soon as once more if the business can reduce its carbon footprint.

5.) Gaming

Blockchain video games are regarded to as a catalyst to carry in extra customers to the cryptocurrency business, which stands to profit bitcoin as the most important digital asset with the longest observe file. More often than not, blockchain gaming tasks have their very own native cryptocurrencies. However GameFi, which is a hybrid class of decentralized finance (DeFi) and gaming, is more and more involving bitcoin too. And these cell video games are additionally making their manner to the App Retailer, the place they achieve publicity to mainstream players. The downloads pale in comparability to Ethereum-based video games like Axie Infinity, however it’s positively one thing to watch in the brand new yr.

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