Cryptocurrencies boomed in 2021, but Bitcoin’s (BTC-USD) late year retrenchment left many investors unsure about the same returns in the new year.
Buoyed by demand for non-fungible tokens (NFTs) and decentralized finance (DeFi), Ethereum (ETH-USD) and smaller cryptocurrencies ended up stealing the spotlight from Bitcoin. Its market capitalization, currently under 40%, is the second lowest it has ever been according to Trading View data.
Trading around $47,300, Bitcoin is down 8% since last week and 31% lower than the all-time high it hit in November near $69,000. While hopes for Bitcoin $100,000 have been dashed in the short-term, bulls remain unflappable — and some aren’t afraid to double down on their predictions.
“Short-term, there may be some volatility,” CryptosRus George Tung told Yahoo Finance on Monday. “Long-term, inflation is going to be a continuing issue, and bitcoin is seen as the best hedge against inflation at this point.”
Samson Mow, chief strategy officer for Bitcoin software company Blockstream, was among those who predicted a move into six-figure territory. He insists the lofty water mark is still a real possibility.
“We’ll see $100k within the first half of the year,” Mow told Yahoo Finance.
He admitted that in the short-term Bitcoin will continue to perform like a risk-sensitive asset, fluctuating based on central banks and government policy, as well as broader shifts within the stock market. But “on a long enough time horizon, [Bitcoin] does its own thing,” Mow added.
Yields and volcanos
His comments follow a similar prediction from El Salvador President turned Bitcoin evangelist, Nayib Bukele, who made a similar call over the weekend. Bukele predicted that two more countries will adopt Bitcoin as legal tender this year.
Recently, Blockstream and El Salvador made headlines, after Bukele and Mow unveiled a partnership to offer so-called “volcano bonds.”
Half of this billion dollar sovereign debt offering will go towards financing “Bitcoin City,” an economic development project located in the Southern part of the country said to be a tax haven, that will also harvest nearby geothermal energy from a volcano to mine Bitcoin.
Among other amenities, Mow said a “zero tax on everything” development zone will transform El Salvador into the “Singapore of Latin America.”
While the bond isn’t available yet, Mow said Blockstream is working with a number of brokers.
The other half of this U.S. dollar denominated 10-year bond offering will be converted into Bitcoin. The 10-year bond which reaches maturity in 2032, carries a coupon of 6.5%. While Mow admitted this novel sovereign security is far more popular with Bitcoin investors than the general investing public, he suggested institutions “starving for yield” will snap up the bonds.
El Salvador’s bond offering follows the…
Read More: Why Bitcoin bulls still think $100K is in the cards despite ugly end to