2021 marked the twelfth year of Bitcoin’s “official” existence, and after last year’s halving, the year started and (mostly) continued on a bullish note, as many, me y understood, expected Bitcoin to surpass $ 100,000 and set new crazy highs. It wasn’t, but bitcoin has had a huge year and sometimes it feels like we’ve become oblivious to major market developments.
2021: the year Bitcoin went mainstream
Despite the great strides that bitcoin, its developers, and hardcore users have made over the past 12 years, 2021 was the year bitcoin really went mainstream. The most important event that cemented bitcoin’s sustainability and ability to invest as an asset was of course that El Salvador became the first country to adopt bitcoin as legal tender, fully embracing the asset. digital like theirs.
In early 2021, no one would have expected an entire country to embrace bitcoin with open arms, let alone as legal tender, launching a dedicated mobile wallet that a majority of their citizens use or invest in their own. bitcoin reserve. Looking back, this was a major move that should have had a much wider impact on bitcoin adoption globally, as well as an increase in its price.
On top of that, we’ve seen top politicians across the United States declare themselves pro-bitcoin, even going so far as to accept all or part of their salary in bitcoin. We were used to athletes doing it, but 2021 really kicked off politicians’ open interest in bitcoin, with Miami Mayor Francis Suarez and Senator Cynthia Lummis making most of the headlines. But there were many, many more who followed in their footsteps.
Then there were companies that openly adopted bitcoin as a hedge against the instability fiat has caused, especially during the economic fallout from the COVID-19 pandemic. MicroStrategy launched a series of events last year that saw companies like Tesla, Block and more openly hold bitcoin. Of course, MicroStrategy continued to stack sats throughout the year, becoming the largest institutional bitcoin holder in the world.
The bitcoin mining exodus in China may have temporarily lowered bitcoin, but it ensured that the concentration of miners was more widespread than before, with countries like Kazakhstan, Russia and the United States seeing an increase. bitcoin mining operations within their borders. Of course, this pushed money into towns and counties that had been neglected in the past and saw favorable regulations put in place to ensure minors didn’t move out again.
The fallout from China’s bitcoin mining ban and their umpteenth bitcoin ban was shortlived, as the hash rate recovered within months and ensured that the country’s future efforts to mitigate the The spirit of bitcoin would have little or no effect on either. the network or the market. It remains to be seen whether the country will ever embrace bitcoin.
El Salvador’s adoption of bitcoin prompted institutions and politicians built on the archaic fiat system to spread FUD everywhere from the International Monetary Fund to the Bank of England, and enemies Donald Trump and Hillary Clinton shared a point. of similar view that bitcoin was a threat to the dollar. This is of course true, where fiat currencies were designed to lose value over time, bitcoin was designed to store value and even grow over time.
2022 will be even more explosive for Bitcoin
While we may not have seen bitcoin reach six digits (in dollars) this year, it is more than likely that in early 2022, bitcoin will rise, exceeding $ 100,000, possibly even reaching $ 150,000. or even $ 200,000 over the course of the year. Sure, bitcoin could exceed anyone’s expectations and just run full blast, but we’d better be careful with our expectations.
Along with a spike in prices, it is likely that in the coming year we will see the United States and other countries implement more favorable regulations for bitcoin investors, whether they are individuals or institutions. Regulation is not always a bad thing, it brings certainty to the market and opens up the pool of willing investors in the market. Countries like the United States are unlikely to ban bitcoin outright, choosing instead to introduce taxes and other measures to benefit investor foresight.
Then there is the chance that another country or even two countries will follow in El Salvador’s footsteps by adopting the Bitcoin standard in 2022. Of course, it would be great if more countries do so, but chances are there will be more. institutions like the IMF will do their best to prevent more countries from adopting bitcoin. It will be interesting to see who comes next, with emerging markets in South America and Africa being the most likely candidates.
Finally, there is a growing chance that a spot ETF will eventually be approved in the United States, which could benefit both investors of these funds and current holders. These funds have grown all over the world and the United States Securities and Exchange Commission cannot continue to disapprove of them forever, risking capital flight and backlash from investors.
Markets could change a lot in 2022
There appears to be an increase in the overall consensus that the way the market moves may change slightly during the current cycle and cycles to come. As more individuals, businesses, and countries enter bitcoin as an investment, there may not be such a dramatic drop once the current cycle hits its peak. Mountain peak.
It’s hard to forget how much bitcoin has spilled right after previous bull cycles, with the early 2018 decline after the 2017 bull run still fresh on everyone’s mind. Because there is a limited supply of bitcoin, let alone daily free market trading, many believe that bitcoin will eventually peak, but the decline that follows will not be as severe and the market could recover a lot. faster because the more investors buy the decline.
Of course, this makes sense when you look at the declines over the past couple of months seeing MicroStrategy and the Salvadoran government stacking a few sats, there are plenty more doing the same and bitcoin is expected to become an asset in the future. six digits, with more regulatory clarity, it is likely that the market recovery will be much faster.
Whether or not that happens remains to be seen, but in my opinion, we will see bitcoin flourish for most of 2022. Just as 2021 was the year that bitcoin went mainstream, 2022 will see bitcoin go into the mainstream. -beyond the mainstream and it’s worth looking forward to …
This is an article invited by Dion Guillaume. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.
