Although Bitcoin's price is stable for now, experts predict a tough test in 2022

2021 was a big year for the cryptocurrency sphere. Besides digital tokens, other futuristic applications like non-fungible tokens (NFTs), decentralized applications (Dapps), and smart contracts have found their way into the virtual ecosystem. While this was on the play, Bitcoin made strides towards mainstream acceptance with institutional investors and stock exchanges accepting it. On the other hand, even central authorities in countries such as El Salvador have adopted BTC as a legal tender. Although Bitcoin's price is stable for now, experts predict that the digital token will face a major test in 2022.

Today, there are over 13,000 cryptocurrencies in circulation. However, what Bitcoin has scored over the past decade is remarkably outstanding. During the Covid-19 breakout and lockdown imposition, Bitcoin's price has gone up nearly fivefold. A blazing rally picked up at the time and continued to ravage the cryptocurrency sphere for a long period. Bitcoin ETF's debut in the NYSE has triggered the cryptocurrency's price to an even higher extend as it was traded for a record US$68,000 at the time. Eventually, other factors like the BTC upgrade and its inflation have further put the digital token at the center of buzz. But despite this improvement, the cryptocurrency market as a whole might be spearheading an economic crisis. Yes, with the Omicron variant shaking up the economic front, Bitcoin's price has fallen drastically since the beginning of December. If this trend continues, BTC will stoop to an extreme low in 2022.

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Bitcoin Might Cause an Economic Crisis in 2022

An economic crisis happens in the backdrop of the government's failure to intervene in uncertain growth. Although the world's largest economies like US and UK might seem to be performing well, they have uncertain drawbacks that could push them into deep economic put.

On the other hand, the growing popularity of BTC and its adoption is also worrying the central authorities. Currently, there are not enough people and institutions to hold on to Bitcoin. However, the BTC market is at the initial phase of institutional acceptance. Once this goes mainstream, the government will be put in a hectic situation to intervene or prevent a financial crisis.

Compared to the US dollar, Bitcoin's price has increased by over 1,000% in the last five to ten years. Although this is a good sign to investors, governments across the globe are on heels to prevent money laundering and financial crimes. If another economic crash takes place in 2022, financial institutions and banks will face a far worse situation than they did back in 2008. Eventually, more people will opt for Bitcoin investment to safeguard their money value. However, experts anticipate that the cryptocurrency market won't be able to handle the pressure as it is detached and too small compared to other financial markets.

How can BTC Escape this Horror?

Recession and an economic crisis are always around the corner. We don't know when and how it will come to hit the actual market. Earlier, people used to invest in high-quality dividend stocks. Today, investing in major cryptocurrencies like Bitcoin remains a top option. Here are some reasons why BTC could overcome a predicted economic crisis.

• Bitcoin itself is built to combat major recessions. It was launched in 2009 during the financial crisis to emerge as a currency that people could trust and would function without the intervention of central authorities.
• A country's fiat currency might lose its value in other nations during a financial breakdown. But Bitcoin can maintain its price as it has a neutral value for everybody. Besides, other factors like regulations, improvement in environmental-friendly means, institutional adoption could also trigger its price up further.
• When BTC was created, it had a supply bar of 21 million. Currently, there are 18 million Bitcoin's in circulation today. This supply limit is creating inflation and keeps Bitcoin's price at a moderate pace.

Where will Bitcoin Reach if it Escapes the 2022 Recession?

According to experts, Bitcoin will manage to reach US$250,000 by the end of 2022 or early 2023. They opine that institutional investors and the government's acceptance of BTC will eventually trigger its price to new highs if it escapes the financial crisis. Already, Major players like Microsoft, PayPal, Starbucks, Overstock, and Home Depot are accepting Bitcoin payments. In 2020, even far big companies like Amazon is expected to open its door for BTC.