Bitcoin in the 100 thousand dollars? “Cheap money” and “metaverse” are the answer

To what extent is the chairman of the US Federal Reserve (Fed), Jerome Powell, willing to implement a “hawkish” monetary policy? What will Facebook do this year? For many analysts, the answers to these questions could determine whether bitcoin will continue its path into 2022 riding a bull, continuing the gains it made last year, or whether it will in turn be thrown by a bear over a cliff.

In the last quarter of last year, Powell recognized the need to bring forward a tapering policy during the course of this year, while Andrew Bosworth , Facebook’s new IT director, stated that 2022 will be decisive to “increase compatibility with blockchain technology, explore Decentralized Autonomous Organizations (DAO) and bet on NFT (Non Fungible Tokens)”.

“It seems that Bitcoin will adopt a bullish trend this year, with a rise to $90,000, after which the price will undergo a market correction”, said Katie Stockton, founder and manager. Fairlead Strategies LLC, one of the experts contacted by Bloomberg about the future of the “cryptoqueen”.

The expert believes that the big bets companies in the metaverse, such as Facebook, is what will most motivate the rise in the price of bitcoin: “The metaverse is a cosmic mess, it is the phenomenon that is exciting investors in 2022 and that will dictate the price of the main cryptocurrencies”.

Antoni Trenchev, a partner at crypto lender Nexo, is of the line that defends that “central banks’ monetary policy is the number one factor that ends the rise or fall of an asset’s price”.

For Trenchev, “there are signs that cheap money is here to stay, something that has huge implications for cryptocurrencies.” “As the Fed doesn’t have the stomach or backbone to withstand a 10% to 20% stock market crash, as well as a backlash in the bond market, it looks like this is going to be a busy year for bitcoin.” defends the entrepreneur.

However, the analyst believes, based on several indicators of technical analysis, such as the use of “momentum”, which “bitcoin could reach 100 thousand dollars by June 2022”. On the other hand, Trenchev does not predict the same luck for other “cryptostars” of 2021, such as Solana and Avalanche, which recorded weekly four-digit rises. “It will be a year of rise, especially for ethereum and bitcoin”, he adds.

Already Jeffrey Halley, senior market analyst at Oanda Asia Pacific , is more cautious in its predictions. In an interview with Bloomberg, he highlights that “2022 will be a year of continued growth for cryptocurrencies, even if the macroeconomic environment is more challenging this year”.

“The main challenge will be the normalization of interest rates, by the Fed and other central banks, which could motivate investors to turn to other assets, the second biggest challenge will be regulation, which if materialize in 2022, could limit the growth of this market”, explained the analyst.

Last year, the US administration gave the first moved towards regulating cryptocurrencies, by approving a document with the “preliminary conclusions” on the crypto-assets market. In October, Jerome Powell assured the US Congress, “that cryptocurrencies will not be banned but will be brought under the law”.

In the “old continent”, the European Commission presented a proposal for the MiCA (European Commission’s Regulation of Markets in Crypto-assets), a regulation that will govern this market in the European block.

According to the Bloomberg forecasts, inscribed in the “Global Cryptocurrencies 2022 Outlook”, for the coming year, the proliferation of revolutionary technologies, such as Stablecoins – virtual assets, whose price is directly related to the price of another asset – and NFT (Non Fungible Tokens) it will be a springboard for price growth.

For Bloomberg analysts there are clear signs that bitcoin will also be favored by the new macroeconomic scenario in 2022. Experts point to a support line in the order of 50 thousand dollars, and a resistance line in the level of 100 thousand dollars.

“Bitcoin will still face strong winds, with a continued drop in the price expected, but everything indicates that the “tapering” policies of central banks more will favor cryptocurrency in the long term”, reads the report.

For Bloomberg, “it is a matter of time, until bitcoin reaches the level of 100 thousand dollars”. “A Potential Pathway to Bitcoin it is to stabilize at a level worth 100 times the ounce of gold (about 170,000 euros)”. Analysts do not deny, however, that after this phenomenon it is very likely that there will be another cyclical fall.

This Tuesday, bitcoin continues to drop 0.19% to $46,862.91.