Whereas I’m not in love with value predictions, once I discovered an affordable 2022 goal for Ethereum (ETH), I’ve to confess I kinda loved it.
So, I figured, why not kick off our first installment of 2022 with a daring prediction of the place we predict the value of Bitcoin (BTC) is headed over the following 12 months?
For this train, we’ll ignore the elemental elements which can be in play behind these value actions. As a substitute, we’ll simply have a look at some charts, perform a little math, and see the place our BTC prediction journey leads us.
So, let’s get began!
Bitcoin Outperformed Shares And Gold Final Yr
Earlier than we put pencil to paper and attempt to give you an affordable value goal for BTC for 2022, let’s take a great have a look at what occurred final yr. And because the following chart clearly exhibits, BTC outperformed the opposite massive boys on the block much more than you may need anticipated. Here is what I imply.
As you possibly can see from this comparability chart, in 2021, BTC, indicated above by the black line, was up 60%. In the meantime, the S&P 500, a great proxy for the broader U.S. inventory market and indicated right here by the inexperienced line, was up 28%. And gold, indicated by the gold line, misplaced 5%
Taken in isolation, Bitcoin’s efficiency was a heck of a feat. However while you examine it to different asset courses, BTC outpaced shares by an element of over 2X. And since gold was at a loss, it clearly received the race there, too.
And do not forget: BTC’s efficiency final yr was laced with bone-crushing volatility and large value swings. For the crypto to nonetheless outpace the large boys on the block, nearly despite itself, is an element that buyers ought to heed as they sit up for 2022.
Crypto Is Simply 1/20 The Dimension Of Shares
Okay. BTC was in a position to outperform shares final yr just about despite itself. So, what sort of a macro upside for crypto are we down the highway?
To reply that query, you simply want to have a look at the sheer market measurement of shares in comparison with crypto.
As you possibly can see from these two charts, the market measurement of crypto present sits at $2.2 trillion. In the meantime, the market cap of all U.S. shares is available in at $41 trillion. That is signifies that crypto is nearly 1/twentieth the scale of U.S. shares.
So, what does that imply? It signifies that the macro outlook for crypto as an asset class is big. Even when crypto have been to double in market cap measurement over the course of 2022, it will nonetheless be just one/tenth the scale of shares. That is quite a lot of headroom for crypto to develop.
And with BTC nonetheless commanding the lion’s share of crypto’s market cap as a complete, a doubling of the crypto asset class would probably be handed on to the value of BTC as effectively.
Bitcoin 2022 Value: $113,972
In 2021, BTC started the yr at $29,374, and by the top of the yr, it was at $46,306. All instructed, that interprets to a achieve of 58%.
For those who assume BTC will do a minimum of as effectively in 2022 because it did final yr, which isn’t an unreasonable assumption, then based mostly solely on these elements, you are a BTC value of $75,345 by the top of 2022. That is a 58% achieve from its beginning 2022 value of $47,687.
Why is that 58% not unreasonable? (Sorry for the double unfavorable.) Heck, shares alone have been up 28% in 2021. It isn’t laborious to imagine that crypto might match 58% in 2022, given its riskiness and recognition.
However because the above chart of BTC’s 2021 efficiency exhibits, final yr was a wild, wild experience. The truth is, BTC hit a 2021 low of $28,723 at first of the yr and a excessive of $68,789 in November. The distinction between that top and low was a mind-numbing 139%.
For those who assume the 2022 low for Bitcoin will repeat in January 2022 because it did in 2021 and that it’ll repeat its 139% achieve as effectively, then you definately’re a 2022 value goal of $113,972 for BTC.
Now, if we add in a long-term development line and a little bit of technical evaluation, we’re trying on the following 2022 value for BTC:
Again To Earth
I hope you had enjoyable with our little Bitcoin value prediction journey. Whereas this prediction for the 2022 BTC value is simply that, a prediction, it will probably shed some mild on the place we predict Bitcoin is headed in 2022.
Keep in mind, if you are going to put money into crypto, hold it to 1% to 2% of your portfolio.
I additionally need to want you and yours a cheerful and affluent New Yr!
Disclosure: This contributor might personal cryptocurrencies talked about on this article. This text is the opinion of the contributor themselves. The above is a matter of opinion offered for basic data functions solely and isn’t supposed as funding recommendation. This contributor just isn’t receiving compensation (apart from from INO.com) for his or her opinion.