Just under a year ago Bitcoin price seemed unstoppable and the magic $100,000 mark was just a matter of form. That has changed, 2022 has been sobering for many crypto investors. Instead of big profits: crime, bankruptcy, fraud. Total market capitalization has been shrinking for months, and after FTX’s momentous collapse, confidence appears to have been cracked as well. Why Bitcoin could still climb the price plateau, with the help of regulators and central banks and why the USD 100,000 mark seems inescapable in the long term.
Regulation: Door opener for mass adoption
Because Bitcoin and Co. are still in their infancy, the industry needs regulatory clarity. US financial watchdogs SEC and CFTC are in charge of the crypto industry, which is largely US-based. Although there have been disagreements between regulators in the past, Presidents Gary Gensler and Rostin Benham agree on at least one crucial point: regulating Bitcoin as a commodity. And not as a security.
This makes Bitcoin the only cryptocurrency with near regulatory clarity. In the future, this could have a positive effect on the large-scale adoption and approval of new financial products such as a Bitcoin Spot ETF. At least if you believe billionaire investor legend Kevin O’Leary, crypto regulation is serving as a catalyst for the next bull market.
The Halving and the 4-Year Cycle
One can also be optimistic about cyclical data sets such as the so-called “Bitcoin Spiral” – a sequence of halvings, all-time highs and price declines that occur every four years. If the trends of the last cycles repeat, the price outlook looks good.
One of the biggest indicators of the next bull market and Bitcoin price target of US$100,000 is the halving, in which the block reward and therefore the supply of new Bitcoin is halved every the 210,000 blocks. Coins in circulation are supposed to increase in value by reducing supply. The opposite trend can be seen in the expansive monetary policy of central banks.
The world needs bitcoin
As the money supply slowly increased between 1960 and 1970, since the decoupling of the gold standard, the United States flooded the foreign exchange market with new US dollars. Monetary expansion peaked at the onset of the global coronavirus crisis in early 2020.
At the same time, the debt increases. According to USDebtClock, the total national debt outstanding in the United States is approximately $31.4 trillion.
This is where Bitcoin comes in: with its flattening inflation curve and function as a store of value, the cryptocurrency could serve as a new gold standard. This is the math of bitcoin maximalists. Even the famous Harvard University now advises central banks to buy Bitcoin, but not out of altruism. If followed, the advice could boost price growth.
Bitcoin forecast: 100,000 inevitable in the long term
When and if Bitcoin will ever hit the $100,000 mark is anyone’s guess. Nevertheless, and despite the tense market situation, most Bitcoin-specific indicators have hardly changed. The scene is still patiently waiting for the next halving as the regulatory framework slowly tightens. If institutional investors or even central banks were to buy Bitcoin in the future, US$100,000 would only be a matter of time.
Disclaimer: This article is not investment advice.
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