Bitcoin (CRYPTO: BTC) first managed to hit the US$50,000 mark for the first time 12 years after it launched on February 17, 2021. Hitting such a price point spurred crypto bulls who thought that the world’s first cryptocurrency would easily breach the US$100,000 mark by the end of the year.
The cryptocurrency’s impressive year-over-year growth of almost 440% was impressive, and it managed to change the opinions of the biggest crypto critics. Rising by three increments of US$10,000, Bitcoin rose past the US$40,000 mark on January 8, 2021. After hitting the US$50,000 mark on February 17, 2021, Bitcoin took less than a month to go beyond the US$60,000 mark on March 13, 2021.
BTC did not manage to hit US$100,000 by the end of last year. Instead, the cryptocurrency has lost the momentum it gained. BTC trades for just under US$29,000 at writing. Many crypto bulls predict that the fabled US$100,000 mark is a possibility by the end of the year, while critics are advising people to be wary of the hype.
Today, we will look at some reasons Bitcoin could breach the US$100,000 mark.
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The rise of the digital metaverse
A prediction for Bitcoin to cross such a high valuation made sense last year when it managed to reach its highest valuation of US$68,000. That’s a far cry from its all-time high right now, and critics do not believe it is possible. However, bullish experts are re-evaluating the crypto industry, as many major global corporations are looking for ways to monetize the metaverse.
Products, games, and experiences of entire worlds offered in the metaverse have increased the popularity of many digital assets, changing investor sentiment on BTC. Bullish experts are reluctant to predict a date. However, they believe that a sustainable long-term rise to US$100,000 might be possible due to organic market movement.
COVID-fueled inflationary pressures
Robert Breedlove, CEO of Parallax Digital, predicted that Bitcoin would cross US$301,000 by October 2021 and $12.5 million by 2031. The prediction was erroneous, and calling it bold would be an understatement, but the reasons appeared sound.
He believes that the inflationary pressures created by COVID-19 on global economies could drive more interest in cryptocurrencies, pushing BTC’s valuation beyond previous projections. While the projections have not panned out, the reasons Breedlove cited could drive the crypto token’s price higher in the coming months.
Bitcoin leaving circulation
Matthew Hyland, a blockchain data and technical analyst, believes that Bitcoin could hit US$100,000 in 2022. The reason for his projection is the surging demand for altcoins and scarcity. Additionally, there is an increasing trend of Bitcoin supply moving away from exchanges, presumably being stored in offline wallets. The decline in Bitcoin circulating in the market could increase its valuation due to supply shortages.
Foolish takeaway
Bitcoin does not possess any fundamentals comparable to equity markets. Projecting price movement for cryptocurrencies is nearly impossible because the best options you have is to refer to the Greed Index and Crypto Fear Index. Investing in Bitcoin entails substantial capital risk, and I would always advise caution when investing in any cryptocurrency.
