Those who followed the movements on the crypto market last year, know how many people were predicting the rise in the value of bitcoin, but also know how many people were suspicious about the possible rise because of the global pandemic and everything the world started to cope with.
At the time, it imagining the value climbing up to 20,000 USD was merely a dream, but when it finally happened the value continued to rise like crazy, leaving everyone in crypto fever. It is the reason why more and more people started investing again. The news began writing about the more possible rise in the value, reaching another all-time high. And so, it happened. Although, every time it rose, it dropped a little bit as well. But still, the value was way above what it used to be.
Its new values represent the highest since its existence, an astonishing turnaround in comparison to where it was nearly a year ago. To refresh your memory, last year when the pandemic started, Bitcoin lost 50% of its value in just two days, dropping below 4,000 USD reflecting instability on Wall Street.
Despite this, the world’s leading coin concluded the year with an increase of 300%. However, this article will not give you the reasons why you should invest in this coin (if you’ve been thinking about investing, visit CryptoTips), but rather discuss the reasons why its value is most likely to continue to rise in 2022.
1. Corona crisis
The most obvious reason is the financial uncertainty that many are facing, due to everything this pandemic brought. For the first time in human history, the world had to stop just because of a tiny virus particle. The economy started dropping all over, people were left without jobs, income, and the consequences are yet to be seen.
Countries introduced lockdowns and measures of social distancing, leaving people to adapt the best way they could. In a situation where you couldn’t normally go to the supermarket and shop, many were forced to purchase everything they could, online. Thus, the crypto market started blossoming, once again. Digitalization that was already present provoked people to change their habits and try out the alternatives. What better way to do it, then start using crypto as a mean of payment?
What could be seen is that many companies started introducing bitcoin as a payment method, making it even more alluring. One thing we know for sure is that we have no idea when all of this is going to end. As we entered 2022, more and more countries are introducing lockdowns, once again and people want to make sure their assets are diverse, just in case everything goes downhill. This creates a fertile ground for the crypto to establish itself in the world of payments.
2. Increased demand on the market
The Crypto market, as well as other markets, highly depends on the demand. Therefore, the value of a particular coin is determined by its demand on the market. The result of everything that’s going on in the world is the increased demand for digital currencies, as we already mentioned in the previous point. Why do people strive to diversify their assets then? Simply because they are afraid of possible inflation. Many see bitcoin and investment in it, as a possible way of protecting themselves from inflation.
Progressive investment in bitcoin will continue, because everyone knows there’s only so much that can be produced, hence influencing the rise in the value this year. As opposed to fiat currencies, no inflation can happen in the world of digital currencies. Central banks can decide to additionally print out their national currency, if the majority votes for it, increasing the amount of money in circulation, decreasing its value, and causing inflation. This is not the case with crypto.
Some large companies have also stated they would allocate a significant percentage of their assets in investing in bitcoin. Some experts even wrote how bitcoin is the currency that intends to stay, at one point even being a substitute for gold.
3. It’s been adopted by retail
Comparing to the past, when the only way to earn a bitcoin was to spend thousands on equipment and electricity for mining, today the possibility of buying it is a lot wider. Many trading platforms have been designed not only to accumulate info about markets so investors could follow the movements but also as software solutions for automatic trading. And they are being perfected day by day. New, cheaper mining possibilities were also designed. The conclusion is, that bitcoin was never this easy to purchase.
We’ve mentioned how many grand companies have chosen to introduce it as a means of payment. The biggest company that did so last year and surprised the world, was PayPal. It influenced the legitimacy of bitcoin, it’s popularity and broadened its usage. Now it can be used for retail. It is only logical that other online payment platforms will follow the example of PayPal, resulting in the rise of this currency’s price.
4. The fall of the US dollar
Those who trade crypto know how important it is to be updated on the value of the American dollar. Its index dropped last year by more than 6,5 %. To everyone’s disappointment, it continued to drop this year as well. Its value is key for bitcoin because the value of the coin is denominated in it (in most cases).
Why did the value of the dollar drop so low? Probably because last year the Federal government decided to print out three-quarters of the overall amount printed in the history of the Central bank.
So, overall predictions for this particular coin are quite hopeful and positive. Many will still be suspicious and say that its volatility isn’t worth the effort, but they should think again. It’s not a surprise so many companies, not only individuals are turning their assets digital. We are obviously entering a new, digital era.