Crypto: Three Reasons You’ll Survive the Freezing Winter
With the bite of COVID, searing inflation rates, and stock market bloodbaths… How can you navigate these times as a crypto investor?
The crypto winter has ambushed investors like an army of Whitewalkers. Yet experts believe Bitcoin reaching $100,000 isn’t a matter of if, but when.
How can you be sure the crypto market will warm up and give us the gains you’re waiting for?
There are three reasons I’ll spoon-feed you today, to keep your crypto blood-sugar high:
1. Bitcoin’s Scarcity
2. Bitcoin’s Gushing from Exchanges
3. Deflation
Bitcoin’s Scarcity
As I’m sure you know by now, bitcoin’s supply won’t increase beyond 21 million. Right now, we’re at around 19 million Bitcoins, so we’ll only see a couple more million minted.
That’s great news for all you HODLers because Bitcoin’s value is a function of its scarcity. Investors, for many years to come, will be competing for a slice of the ‘Bitcoin pie’.
And we’re sure to see demand continue to rise with mainstream adoption increasing by 113% each year, according to CoinShares’ data. Meanwhile, new supply will soon cease to continue. We’ll see the opposite of what’s happening with fiat currencies in 2022. There won’t be inflationary pressure imposed upon your holdings, and you’ll see your crypto assets perform well as a result.
Bitcoin’s Gushing from Exchanges
According to Glassnode, Bitcoin has been consistently leaving exchanges since 2020.
Why does that matter? It means that all crypto holders, from individuals to institutions, are valuing external storage to exchanges as a method to hold their crypto.
The good thing about this is that it costs gas fees to move crypto into storage outside of exchanges. An exodus to external storage, therefore, means that investors are likely to hold their assets for a longer time. It’s a sign that there’s continually less liquidity of Bitcoin, which matters because when the demand for Bitcoin spikes again, there will be even less available supply to meet it. In other words, you’ll soon see the milky white moon approaching.
Deflation
Did you think Bitcoin’s price would hit six figures in 2021? We all wanted that last Christmas. We gave it our heart but it took it away. Brutally.
Well, there’s hope. Some experts believe Bitcoin could hit its coveted six-figure price in 2022. But how?
It’ll be through deflation, according to Bloomberg’s Intelligence senior commodity strategist, Mike McGlone. McGlone believes oil prices will continue to sink lower, reeling toward $50 a barrel from the current price of $90.50 in the week commencing 09 August 2022.
Oil prices plummeting, according to McGlone, will put deflationary pressure on worldwide trends, consequently increasing the price of gold to $2,000 an ounce, from $1,797 per ounce on 09 August 2022.
And this, ladies and gentlemen, is why deflation will cause a rise in Bitcoin’s price above the six-figure mark in 2022.
Conclusion
You’ll see many tumultuous events in Bitcoin’s lifetime. Being a holder can certainly feel like a rollercoaster ride at times. But holding (pun intended) onto an awareness of Bitcoin’s tokenomics, its great exodus from exchanges, and its connection to macroeconomics can give you the confidence you need to break through the icy winter into the next rampant bull run.
