By | January 3, 2022

El Salvador President Nayib Bukele foresees bitcoin reaching the long-elusive six-digit worth this yr amid growing adoption as a sovereign forex.

In 2022, bitcoin will attain $100,000 and two extra nations will undertake the digital asset as authorized tender, Bukele tweeted on Sunday, including that the cryptocurrency may also change into a serious subject within the U.S. midterm elections to be held on Nov. 8.

El Salvador embraced bitcoin because the official forex in September final yr, venturing into uncharted waters and drawing the ire of the Worldwide Financial Fund. Bukele went a step additional in November, saying plans to subject a $1 billion “Bitcoin Bond” with a 10-year maturity on the Liquid Community. Half of the proceeds from the bond subject will fund the development of a brand new ”Bitcoin Metropolis” alongside the Gulf of Fonseca close to a volcano.

In keeping with Blockstream projections, the annualized yield provided by the bond might attain as excessive as 146% within the tenth yr, topic to bitcoin rallying to $1 million within the subsequent 5 years – a considerably farfetched goal on condition that the cryptocurrency is at present buying and selling round $47,000, having peaked close to $69,000. El Salvador has been a constant purchaser of the dip, an indication of confidence within the cryptocurrency’s long-term worth prospects.

Whereas bitcoin rallied almost 60% in 2021, outperforming conventional property by a big margin, the widely-anticipated worth goal of $100,000 remained elusive, because of the U.S. Federal Reserve’s hawkish shift and broad-based danger aversion in monetary markets in November and December.

Whereas Bukele expects bitcoin to regain its mojo this yr, some observers foresee the cryptocurrency underperforming cash related to layer 1 blockchains like Ethereum, Avalanche, Fantom, Solana.

Singapore-based QCP Capital really helpful diversification out of bitcoin and into as basket of layer 1 cash as one of many trades for 2022.

In keeping with Jeff Dorman, chief funding officer at Arca Funds, thematic investing is predicted to drive most good points in 2022. “From an funding standpoint, Arca stays thematically centered on DeFi, sports activities and leisure because it pertains to fan engagement, gaming and NFTs, and net 3,” Dorman mentioned in a weblog put up printed on Dec. 22.

“As institutional capital enters the market in an exponential vogue, the marginal purchaser will far outpace the marginal vendor,” Dorman added.

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