Jakarta, CNBC Indonesia – Although the performance of the crypto asset bitcoin (BTC) is currently in a consolidation phase, analysts Bloomberg predicts the prospect of the largest market cap crypto will be bright next year. In fact, the price of bitcoin is predicted to break through the level of US$ 100,000/coin in 2022.
Launch Global Cryptocurrencies 2022 Outlook December 2021 issue released Bloomberg, senior commodity strategist Bloomberg Intelligence Mike McGlone predicts, the United States (US) will embrace crypto assets in 2022.
This was driven by China’s ban on bitcoin mining — today, mining has moved to safer locations in the US and Canada — and the growth of technologies such as crypto dollars and cryptocurrencies. non-fungible token (NFT).
“New impetus from the Federal Reserve [bank sentral AS alias The Fed] to take punch bowl (to take away the punch bowl), and declining US bond yields may indicate a favorable macroeconomic environment in 2022 in favor of the top crypto assets Bitcoin and Ethereum,” said McGlone, quoted by CNBC Indonesia, Friday (10/12/2021).
Punch bowl is a large and wide bowl, in which the drink punch served. Temporary, punch refers to a wide variety of beverages, both non-alcoholic and alcoholic, which generally contain fruit or fruit juices.
Well, an old aphorism states that the Fed’s job is to “take punch bowl just as the party was heating up.” Those words were spoken by William McChesney Martin who served as Fed Chair in the 1950s and 1960s.
In monetary jargon, William’s words refer to the central bank’s decision to reduce the stimulus it has provided to the economy. This relates to the efforts of the Fed which has recently signaled will speed up tapering or a reduction in the value of the asset purchase program (quantitative easing/QE) as US inflation continues to soar.
The Fed’s current QE value is $120 billion, and tapering started last November. That is, until QE becomes zero it will take 8 months.
The Fed is now expected to increase tapering up to US$ 30 billion per month, so QE will be zero within 4 to 5 months. In addition, the Fed is also predicted to give aggressive indications of raising interest rates next year.
For now, the Fed is expected to raise interest rates two to three times next year.
Previously, loose monetary policy by supplying more money to the market was carried out by the Fed to help the US economy which was contracted due to the Covid-19 pandemic that had been going on since early last year.
“Crypto assets showing different strength than stocks towards the end of 2021 could signal digital assets are coming back have a superior performance in 2022,” said McGlone.
McGlone explained that compared to broad US stock indexes, which haven’t fallen more than 10% since 2020, the crypto market may have a relative advantage next year.
“Our chart depicts the Bloomberg Galaxy Crypto Index recovering despite the decline in the S&P 500 stock index in late November. Crypto is a risky asset, but [kripto] major — Bitcoin and Ethereum (ETH)– may be transitioning towards hedging assets (stores-of-value),” imbuh McGlone.
McGlone also emphasized, supply (supply) less and less is the main attribute of the 2 giant cryptocurrencies. Indeed, scarcity is an attribute that bitcoin’s rival asset has traditionally had: gold.
Bloomberg Supports Crypto Dollars
Bloomberg also said the crypto dollar is the most significant advance pioneer of the digital money revolution in the crypto world. “In a world that is rapidly evolving towards the digital age, the shift to transacting via digital tokens may be unstoppable,” he said.
“The ability to transact and send dollars around the clock with instant settlement, and to earn interest well above eurodollars, is an attribute of crypto dollars, with implications for digital assets like Ethereum,” McGlone said.
Crypto dollar is McGlone’s term for a type of crypto stablecoin or crypto whose price is designed to be pegged to a cryptocurrency, fiat currency, or commodity traded on an exchange. Tether (USDT), which is an Ethereum token, is the largest example of a cryptocurrency or stablecoin.
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