Bitcoin May Dash Towards $100,000 This Year. Should You Invest? What Analysts Say

Bitcoin May Dash Towards $100,000 This Year. Should You Invest? What Analysts Say

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Bitcoin prices have seen highs and lows throughout 2021 and the world’s largest crypto coin has entered the new year with a bash. It has gained much more than last year, reaching its peak of $69,000 during the later part of 2021. In 2022, Bitcoin prices are in the focus, as the crypto coin had encountered continuous falls to reach the $42,000 mark, after it peaked, due to various reasons. One is the emergence of the Omicron variant of Covid-19, which was detected late last year. This triggered investors from withdrawing their intent to invest in risk attest like cryptocurrencies. Major corrections also happened after Bitcoin peaked, but the crypto coin certainly entered 2022 with more gains than losses.

“Bitcoin dominance has hovered around the 40% mark for most part of the year. After reaching a new all-time high few months back, BTC has largely remained range-bound. Bitcoin has transformed from a speculative asset to a store of value. With this in mind, we can expect institutional buying to pick up in 2022,” said Edul Patel, CEO and co founder of Mudrex, a global crypto trading platfrom.

He added that Bitcoin prices might edge towards the $100,000 mark but there was a catch. “In that case, Bitcoin is bound to make a dash towards the $100,000 mark. However, adoption has a massive impact on the price movement. With its limited network usability, the Bitcoin blockchain would need revolutionary changes to even come close to Ethereum’s adoption,” said Patel.

In India, cryptocurrency prices this year also depends on the government’s plan to introduce regulatory laws for the digital tokens. Prime Minister Narendra Modi said that the coins have potential to give rise to more frauds. Finance minister Nirmala Sitharaman earlier last year said that the government has reworked the bill that proposed to ban all cryptocurrencies, but has no plans to consider Bitcoin as an official currency in the country. She also discouraged any speculation about the upcoming bill, calling it unhealthy. She confirmed that the government will prepare a well-consulted Bill before introducing it to the Parliament. However, the winter session of the Parliament did not see any such thing happening.

The RBI has repeatedly flagged the impact of cryptocurrencies on macro economy. “”Private cryptocurrencies pose immediate risks to customer protection and anti-money laundering (AML)/combating the financing of terrorism (CFT). They are also prone to frauds and to extreme price volatility, given their highly speculative nature,” it said. Longer-term concerns relate to capital flow management, financial and macro-economic stability, monetary policy transmission and currency substitution,” the central bank has said in its annual financial stability report.

“The new crypto currency bill is bound to make the space more mature. Regulation would lead to companies innovating and building In India. The new bill would provide clarity to several gray areas,” said Patel on the anticipated bill.

This leads us to the question — Should investors invest in cryptocurrencies in this scenario? Patel says there is no perfect time to decide this. “There is no such perfect time to enter the markets. Seasoned investors always look at investing small amounts in regular intervals. It helps in doing dollar cost averaging and eliminates the need to time the market. So yes, now is a good time to start your investing journey,” he told News18.com in a note.

“Some of the fundamentally good coins to look at are Ethereum, Solana, HBAR, Algorand, Binance Coin, LUNA, etc,” the analyst added.

So, while you gear up for the new year, make sure to choose judiciously while investing in cryptocurrencies, keeping in mind all the possibilities the sector has to offer.

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