- The 1% are turning to Bitcoin and other cryptocurrencies as Plan B in case “fiat goes to hell”.
- These fears may push Bitcoin to unseen heights with some calling $220,000 in 2022.
- Bitcoin is presently stuck in the doldrums of around $46,000 in what has been a slow start to the year.
In recent months, concerns over the state of fiat have heightened amongst the ultrarich with several billionaires eyeing cryptocurrencies. Hungarian billionaire Thomas Peterffy is among the class seeing immense value in Bitcoin.
Fiat Fears, Bitcoin’s Gains
Increasing inflation in the last quarter of 2021 has cast a large shadow of doubt in the minds of billionaires on the reliability of fiat currencies. In the US, inflation figures reached a 38-year high, triggering panic amongst investors while Bitcoin and other similar assets performed remarkably well.
In light of these, billionaires are looking at cryptocurrencies as a hedge against inflation. Ray Dalio, founder of Bridgewater Associates stated that he owned a stash of Bitcoin and Ethereum because “money is a dumpster and inflation erodes purchasing power”. Cathie Wood, CEO of Ark Investment Management thinks that Bitcoin is on course to exceed $500,000 within the next five years as a result of fiat fears.
This sentiment was put succinctly by Hungarian billionaire Thomas Peterffy as he felt it will be wise for investors to put two or three percent of their wealth in cryptocurrencies in the eventuality that fiat “goes to hell”. His company has already begun offering clients the option of trading top cryptocurrencies like Bitcoin, Ethereum, and Litecoin in line with his current view of the asset class as a potential hedge against inflation.
“I’m pushing my $220,000 prediction to 2022. All of Bitcoin’s fundamentals are screaming higher,” says Max Keiser, a vocal Bitcoin maximalist. “I’m on my way to El Salvador where the Bitcoin revolution will expand and push fiat money into extinction.”
El Salvador’s president, Nayib Bukele famously predicted on New Year that the asset will reach $100,000 in 2022 and that two nations will follow the country’s lead in accepting the asset as legal tender.
The Failed Predictions
Last year, the air was rife with predictions that Bitcoin would soar past $100,000 before December 31. This prediction was called by several leading analysts including Plan B and Bloomberg’s Mike McGlone banking on the fact that the asset had reached an all-time high of $68,789 in November amid several positive reports.
Things did not go according to plan with Bitcoin closing the year on a disappointing note at prices below $50,000. The hopes that the SEC would launch a Bitcoin spot ETF received a disappointing blow after the Commission’s rejection of VanEck’s application and postponement of the applications of Grayscale and Bitwise.
Bitcoin is trading at $41,979 which is a 12.85% slump over the last week. Despite the slump, transaction volumes are up by 6% in under 24 hours but market dominance has fallen below the 40% mark for the second time in a week.