The price of Bitcoin is likely to continue its skywards trajectory until at least the second quarter of 2022 amid continuing global inflation fears.
The prediction from Nigel Green, CEO and founder of deVere, comes as the world’s dominant cryptocurrency hit another all-time high at $69,000 on Wednesday.
It followed data revealing that inflation has surged to a 31-year high in the United States, raising the prospect that the Federal Reserve will raise interest rates sooner rather than later.
According to the data, prices paid by U.S. consumers jumped the most since 1990 last month, climbing a staggering 6.2% from a year earlier.
“This latest data out of the U.S. will only compound global fears about inflation as price pressures run hot around the world,” Mr. Green says.
In the UK, inflation is expected to rise above 5% by early next year. Euro area annual inflation is 4.1% in October 2021, up from 3.4 % the month before, and the cost of goods leaving Chinese factories surged by another record rate last month – 13.5% – and there are increasing signals that consumers are now feeling the pain.
Bitcoin could head skywards
Inflation, according to Mr. Green, “is a global issue as businesses have been raising prices as supply chain bottlenecks and a shortage of qualified workers push up costs. And it’s one that is likely to last until at least the beginning of the second quarter of 2022, when pressures should start to ease.
“Against this backdrop, and amid some peaks and troughs along the way as markets never move in a straight line with traders taking profit, we can expect to see the price of Bitcoin and other major cryptocurrencies continue their skywards trajectory.”
For one thing, Bitcoin is widely regarded as a shield against inflation mainly because of its limited supply, which is not influenced by its price.
This ‘inflation shield,’ says the deVere CEO, will bring to the crypto market growing investment from major institutional investors, bringing with them capital, expertise, and reputational pull – and further driving up prices.
Earlier this week, as he accurately predicted that Bitcoin would hit fresh all-time highs, Mr. Green said other cryptos can also be expected to move to the upside.
“Bitcoin’s gravitational pull on other digital assets will show itself again this week, pulling up other major cryptocurrencies as it maintains its own strength.”
Fintech-related cryptos like Solana, Ether, and Cardano are expected to do particularly well.
He concludes: “In this inflationary period, Bitcoin has outperformed gold, which has been almost universally hailed as the ultimate inflation hedge – until now.”
