That sent the cryptocurrency down more than 17% since its all-time high earlier this month.
As it recovers 4% on Monday morning, one expert reckons now is a ripe time to buy.
“Bitcoin is unstoppable, and I fully expect to see prices double over the next 12 months,” said deVere Group chief executive Nigel Green.
“This dip in cryptocurrencies – which are, of course, the inevitable future of money – will be used by savvy investors as a major buying opportunity, topping up their portfolios with the current lower entry points.”
Bitcoin is so mainstream now
The fact that Bitcoin sank so much in line with share markets on the first news of Omicron tells Green that the cryptocurrency has truly arrived.
“The discovery of a new COVID variant has rattled global stock markets as it brings in a new wave of uncertainty, which they hate,” he said.
“The crypto markets have mirrored the reaction of other financial markets. This underscores how mainstream digital assets have now become, as an increasing number of institutional investors have piled into Bitcoin this year.”
But Bitcoin’s value plummeting because of a new health crisis doesn’t make sense, as traditionally, it has been seen as a store of value – like gold.
So a revival in fortunes is inevitable.
“I think this [is] a knee-jerk reaction from the crypto market. It will move on from this relatively quickly as it did with the Delta variant in the summer,” said Green.
“Why? Partly, because now we have more of a roadmap of how to deal with variants. But importantly because amongst retail investors it is increasingly regarded as a safe haven asset, similar to gold.”
Inflation fears will return, making Bitcoin more valuable
As he said with share markets, Green reckons the cryptocurrency investors will soon move on from the Omicron threat and return to worrying about other issues.
“Investors will once again focus on heightening global inflation fears caused by lingering supply-side issues,” he said.
“As such, amid some peaks and troughs along the way as markets never move in a straight line with traders taking profit, we can expect to see the price of Bitcoin and other major cryptocurrencies continue their upwards trajectory.”
Bitcoin has historically done well in times of inflation anxiety because of its finite supply. The currency has been programmed to have no more than 21 million coins in circulation.
And this would continue to drive demand from large investors, who for so long ignored Bitcoin as a legitimate asset.
“This ‘inflation shield’ will continue to bring to the crypto market growing investment from major institutional investors, bringing with them capital, expertise and reputational pull – and further driving up prices.”