Bitcoin is currently under a bearish spell right now. The index is currently hovering just below $50k at press time but many analysts believe that early 2022 is likely to be the next phase of the current bull run. According to a popular Bloomberg Intelligence analyst, the premier digital currency could get to as high as $100k in 2022 and Gold as high as $2k due to rapidly developing deflationary forces.
Bitcoin is currently facing a lackluster end to 2021 that is for sure. For much of the last few months, traders had been anticipating a massive climax to the current bull run by the end of 2021. However, much of November and now December have resulted in considerable bearish bias and it is turning out to be an anti-climax for the crypto scene. Some traders believe that Bitcoin will brave these short-term losses and then make a comeback in 2022.
Bloomberg’s analyst Mike McGlone believes that both Bitcoin and Gold will have a much better 2022 as deflationary forces come into play. He tweeted:
$100,000 #Bitcoin, $50 #Oil, $2,000 #Gold? 2022 Outlook in 5 Charts – Peaking commodities and the declining yield on the Treasury long bond point to risks of reviving deflationary forces in 2022, with positive ramifications on Bitcoin and gold. pic.twitter.com/j3VNAOCwuz
— Mike McGlone (@mikemcglone11) December 9, 2021
Inflation has indeed hit countries around the world hardest. The latest US Consumer Price Index (CPI) which is a measure of inflation in the country is expected later today and it might paint a damning picture for the near future and expected to be north of 6% at least. Similarly, in Europe, the CPI or inflation figures are expected to reach as high as 5% as the global shipping crisis, large amounts of stimulus money and Coronavirus restrictions continue to cause problems. This is the highest level the CPI has been in decades and that could cause further problems for the average consumer as the value of the currency continues to drop. Bitcoin and Gold are now being seen as hedges against inflation. Gold has historically been viewed like that because of its limited existence but now, Bitcoin is also in the picture as it has stronger deflationary mechanisms in place and users are now considering it as a hedge against inflation.
So, many like McGlone believe that the cryptocurrency sector will bounce back sharply because of the prevalent high inflation sentiments. But, only time can tell whether these predictions will actually become true.
Image Source: pixabay.com
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