A new report from the financial analysis firm FSInsight predicts that Bitcoin (BTC) will be worth $ 222,000 by the end of 2022, while Ether (ETH) could reach $ 12,000.
With current prices on BTC ($ 43,350) and ETH ($ 3,080), this means five and four price increases, respectively.
The Digital Assets in a Post-Cycle World report outlines several factors that are likely to be combined to push prices to such a high level by the end of the year. Compared to other cycles, bitcoin does not appear to have reached what the report calls a “hyperspace valuation.” This can be attributed to increased market efficiency or a shift from a payment solution to a value store.
The absence of bubble-like prices is demonstrated by the fact that since the Bitcoin halving in May 2020, BTC’s market value has reached its peak with only a 3.7-fold increase. This is the lowest growth since halving in 2016, when the market value reached a peak of 4.2x.
Halving is when the mining reward given for each block is halved, which reduces the new offer entering the market. In the 2020 block, the block reward was halved to 6.25 BTC per block.
Supply dynamics is also seen by FSInsight as a bullish signal. An illiquid supply of BTC – bitcoin that has found long-term storage in a vault – accounts for about 75% of the circulating supply. The report said:
The power supply dynamics are best described as a powder keg. The question remains who will ignite the fight. ”
This note is closely related to a video posted on Monday on InvestAnswer’s YouTube channel. Host James Molarni said that due to the current shortage of sellers, “buying 100,000-200,000 bitcoins in a week or two” could push the price up 3 times.
The FSInsight report also notes that bitcoin’s realized market value (MVRV) is at its lowest level since April 2020, when the price was still below $ 10,000. From that point on, the price of BTC rose steadily over the next year to a peak of around $ 57,000 in May 2021
Ultimately, the report expects the BTC price to reach a range of $ 138,000 to $ 222,000 by the end of 2022.
The positive outlook for ETH is beginning to show how Ethereum will generate around $ 10 billion in taxes in 2021. According to the report, this represents an annual growth rate of 1564% as of 2020.
The annual growth rate for ETH in 2021 compared to 2020 was 1564%. Source: FSInsight.
The ETH supply dynamics also show bullish signals for analysts, noting that the burnout mechanism from the implementation of Ethereum Improvement Proposal 1559 creates “anti-inflationary pressures”, but adds:
“Although we do not think it is necessary to make ‘healthy’ money with ETH, it certainly makes sense in terms of price.
Related: Ethereum price evenly above $ 3000, but network data suggests bulls may be caught
FSInsight analysts concluded that ETH is “significantly undervalued.” Analysts have taken into account the consolidation, Ethereum’s transition to a Proof-of-Stake consensus, the development of a Tier 2 platform and the potential launch of exchange traded funds to predict a price of $ 12,000 by the end of 2022.