The stock market showed signs of recovery on Tuesday after the rumors of Russia invading Ukraine on that day turned out to be untrue. The media pundits screaming about a Russian invasion sounded more like sports analysis with failed March Madness predictions. When those rumors came out, the rumors hurt both the stock market and the crypto market.
With those rumors proving to be false, for now, Bitcoin also saw some recovery from the news that sent it down last week. However, investors and holders of Bitcoin are wondering if the cryptocurrency will make a recovery to its previous all-time high or if it will fall again on the subsequent rumored invasion on the news. While the crypto market has always had its swings, it can be hard to tell what will happen next unless you look deeper into the world of Bitcoin.
Bitcoin’s Path to Recovery: A Lower Buy-In Point
While people that brought into Bitcoin back in November, when the crypto hit its all-time high, don’t want the price of Bitcoin to be lower, that lower price point gives people a better opportunity to invest in Bitcoin. When more people who have confidence in Bitcoin can invest in it, it will give Bitcoin added stability. That added stability will help Bitcoin in the long run, helping it to recover in price and at some point stabilize on a fixed price.
With Bitcoin’s all-time high being over $65,000 back in November, most people can’t invest in something like that. But with the price of Bitcoin hovering around the $42,000 mark, it opens up the market a little more for investors. However, Bitcoin has come a long way since the market crash back in 2020, which saw Bitcoin hit just under $5,400 at the start of the market crash.
Millionaire Investors: The People That Now Control the Bitcoin Market Via Investment Firms
With Bitcoin being nearly eight times more than what it was worth back in 2020 and around 12 times more at its peak in November of 2021, the newer investors of large amounts of Bitcoin now are millionaire investors. These investors are using brokerage firms that allow for the buying and selling of Bitcoin to their wealthiest clients. With those transactions controlled by the investment firms on behalf of their clients, those firms will sell off any Bitcoin investments at the first sign of anything that could affect the stock market.
While these wealthy clients may not know it, they control the Bitcoin market if they are allowing an investment firm control when they buy or sell Bitcoin with their client’s investment money. When those firms move into the Bitcoin market with huge buy-ins for their clients, it causes the value of Bitcoin to go up, while the value goes down when those firms sell-off Bitcoin in large amounts. These firms now have a hold over the Bitcoin market, putting the cryptocurrency more in line with the stock market’s movements than it was in the past.
What’s Next for Bitcoin in 2022
Bitcoin had a pretty amazing 2021 but has had slumps in 2022 so far. With central banks in countries around the world shifting towards a Central Bank Digital Currency (CBDC), will Bitcoin remain relevant in 2022 or beyond? The answer to that is very complex, but Bitcoin will most likely still have relevance in 2022 due to the number of people and businesses that are invested in Bitcoin.
While China and Japan are rolling out their own CBDC’s in 2022, Bitcoin hasn’t been affected by those two countries doing those things. However, the digital dollar is the most significant CBDC people discuss but has yet to be released in the United States. The Federal Reserve has announced that it will have a meeting in May 2022 on whether they will push for a CBDC in the United States.
A digital dollar is significant concerning Bitcoin because Bitcoin is valued based on the dollar. If the Federal Reserve adopts a digital dollar, it might cause issues with Bitcoin and other cryptocurrencies in the market. So for everyone invested in crypto, May 2022 will be the date to see if a digital dollar will happen and if that will affect Bitcoin if they adopt the digital dollar.