This year the world’s largest cryptocurrency, Bitcoin, fell more than 50% on one occasion, and almost 40% on another. Investor communities via Twitter and Reddit show that there is great potential for abear market, or bear market, next year. What factors could help Bitcoin avoid a crash?
Among the main factors that are mentioned for the collapse of BTC prices, is the rising inflation in the United States, which could lead to a global economic crisis.
Another is the new variant of Covid-19, Omicron, which has generated panic in the investing public, given that it is feared that we will return to what was the pandemic in mid-2020.
A third explanation for this price collapse theory is the restrictions and prohibitions imposed by some countries, mainly China and also the regulations and taxes on cryptocurrencies by countries like the United States.
In relation to this, Facundo Salto, current COO of Criptofolio, told Infobae: “Although many reasons can end in financial crises, the most important of all is fear. The panic in investors causes them to seek to exit equities (investments such as stocks or cryptocurrencies such as Bitcoin) and seek to move to fixed income, such as US bonds. for example. So the main factor to avoid an abrupt fall in BTC prices is to avoid panic in investors ”.
Fear of inflation
According to Salto, the fear of an economic crisis as a result of a high inflation rate in the main economic powers worldwide may be one of those factors. In addition, he points out that the closure of countries for tourism, imports, exports and more, also generates uncertainty in savers around the world. “Ultimately, what has to happen is that there is not a generalized fear, added to an influential factor such as a new strain, crisis, or other reason”, he concluded.
This year, although it has not been entirely favorable for the number one cryptocurrency, it has managed to maintain with a rise since the beginning of the year. Last January each Bitcoin cost almost $ 29,000. 4 months later, with a constant rise, it was worth almost 65 thousand dollars per unit, registering a rise of almost 125 percent. But from then on, its value fell almost non-stop in the following three months, until it once again reached $ 29,000 per unit.
The balance of ups and downs is that Bitcoin registers a rise of 76% so far this year.
Fortunately for investors, the price recovered more than once, reaching an all-time high of $ 69,000, an increase of almost 140% from the floor it had previously made. But then it fell again, reaching 42 thousand dollars per unit, although in recent days it rose more than 20 percent, until now it is worth more than 51 thousand dollars. In the balance, Bitcoin registers a rise of 76 percent so far this year.
Corrections, not bear market
“This year there was no bear market, there were only two big corrections, they are totally different. The bear markets they can last for months and even years. So that the prices of stocks, Bitcoin, and Altcoins do not collapse, what has to happen is that the global economy remains stable, both due to Covid issues and inflation, “he said Sergio Turi, CEO of Investments in the World ..
But those are not the only factors. “Greater adoption will also be needed by those who currently do not invest in this cryptocurrency. The development, and the advance towards new technologies, will provide the BTC with the conditions and the necessary support so that it remains firm, with a small upward trend, instead of falling “, concluded Turi.
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Bitcoin: what factors would help the value of the main cryptocurrency not collapse in 2022