Is Bitcoin A Good Investment In 2022?

Learn why Bitcoin could be a good investment this year

Last Updated February 8th 2022
6 Min Read

Overall, 2021 was a good year for Bitcoin. It started the year trading at $29k, and despite the ups and downs of the market, Bitcoin was trading at around $50,000 in December 2021. So after a rocky November/December, is the Bitcoin bull market about to restart in 2022?

This article looks at five reasons why Bitcoin could be a good investment in 2022.

2021 was a rollercoaster year for Bitcoin. It started the year bullish after it pushed through its 2017 all-time highs in late 2020. FOMO built around Bitcoin in January 2021 and tested $41k by January 9th.

However, profit-taking saw Bitcoin enter a correction towards the end of January. In February, Bitcoin built up upside momentum after Elon Musk announced that Tesla would start accepting BTC payments.

By May 2021, Bitcoin had made new all-time highs of $64k. However, immediately after the $64k peak, a stream of bad news followed.

One of them was Elon Musk’s announcement that they would discontinue Bitcoin as a form of payment. Musk stated that Bitcoin was mainly being mined using coal, which negatively impacted the environment.

Within this period, China announced a crackdown on Bitcoin mining. Combining this bad news saw Bitcoin crash to a low of $29k by July.

However, after a crash of more than 50% from its peak prices of $64k, Bitcoin became a solid buy for many investors. Institutional inflows saw Bitcoin make a new high of $69k by mid-November.

Unfortunately, news of a new coronavirus variant negatively impacted all financial markets, and Bitcoin was no exception.

By early December 2021, Bitcoin had lost more than 20% and was trading at lows of $42k.

The bearish market had Bitcoin's price fluctuate through the next months, going as low as $33K, but at the time of writing Bitcoin had found support around $43,500.

Experts believe that with the Omicron news priced in and Bitcoin now solidly above $40k, the year 2022 could be bullish for Bitcoin. There are even predictions out there that Bitcoin could trade above $100k at some point in 2022.

If by any chance, such predictions come true, it would mean that Bitcoin has the potential to rally by 100% in 2022. This makes it an incredible investment opportunity for 2022.

A Volatile 2021

The year 2021 was a rocky one for Bitcoin. It started on a high note with a combination of FOMO and a major corporation (Tesla) accepting it for payments.

Bitcoin then crashed in May and tested lows of $29k by July. However, these lows did not last, as institutional buying pushed the price back up. By November, Bitcoin had made new unprecedented highs of $69k.

Is Bitcoin A Good Investment In 2022?

Experts believe that Bitcoin could turn bullish again in 2022. There are several reasons why Bitcoin could be a good investment in 2022. Some of the big ones are as below.

5 Reasons To Invest In Bitcoin In 2022

1. A spot settled Bitcoin ETF

One of the key factors that have given Bitcoin upside momentum in H2 of 2021 was the approval of the ProShares Bitcoin ETF.

However, the impact was short-lived mainly because the Pro-Shares ETF tracks futures markets. A more impactful ETF would be settled at spot prices since it tracks the actual price.

Analysts believe that the Bitcoin market is now large enough and that there is a high chance that the SEC could approve a spot-settled Bitcoin ETF in 2022. Grayscale Investments, which runs the largest Bitcoin ETF, has already filed to convert its fund into a spot ETF.

This is a reason to be bullish on Bitcoin, as if approved, it could test prices above $100k.

2. Bitcoin’s entry into the smart contracts space

Bitcoin’s market dominance has shrunk significantly over the last couple of years. This has a lot to do with the growing popularity of Ethereum, Solana, and other programmable blockchains in DeFi.

In 2022 Bitcoin could pull a surprise in this market. This is all thanks to projects like Stacks that are making Bitcoin programmable. Considering that Bitcoin is the most secure blockchain out there, it could gain traction in the smart contracts market pretty fast. This could play a role in its value appreciation all through 2022.

3. Institutional interest in Bitcoin is high.

There has been a growing institutional interest in cryptocurrencies over the last couple of years. Bitcoin has taken the lion’s share of this money, which is unlikely to change in 2022.

That’s because Bitcoin’s dominant position makes it the safer bet for institutions looking to diversify into high-growth alternative assets. This growing institutional interest in Bitcoin could see it turn bullish in 2022.

4. Regulations could become clearer in 2022

The regulatory environment has improved for cryptocurrencies over the last few years. Now in 2022, regulations are only set to get better, especially with regards to DeFi, and stable coins.

This will serve to bring even more institutional money into the cryptocurrency market. Being the largest cryptocurrency, Bitcoin will likely benefit the most from a clearer regulatory environment in 2022.

5. More data is being gathered about Omicron.

The emergence of Omicron is what applied brakes to Bitcoin’s recent rally that saw it test prices above $69k. That’s because the uncertainty it created saw investors get out of high-risk investments such as cryptocurrencies.

However, as more data is being gathered and it becomes more apparent that vaccines work against the new variant, confidence in the financial markets will return.

Considering that Bitcoin has emerged as a valuable alternative asset class, this could see money flow into BTC for the better part of 2022.

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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

So Is Bitcoin A Good Investment In 2022: Conclusion

Ultimately, it is up to you to decide whether Bitcoin is a good investment or not. That said, many investors believe in Bitcoin’s potential to outperform all other assets.

The year 2021 was a good one for Bitcoin; despite all the ups and downs it experienced throughout the year, it ended the year on a high note, making it one of the best investments of any asset class. In essence, Bitcoin is one of the best investments for investors chasing a high ROI.

However, it is essential to note that cryptocurrencies are highly volatile assets. When investing in Bitcoin, be aware of the risks, and adjust your strategies when investing in BTC. It would help if you also did your own research, and extensively so, before committing money on any cryptocurrency asset, including Bitcoin.

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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

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