The Bitcoin cryptocurrency has certainly been among the better investments of the last few years. The value of it is up around sixfold over the last two years, and it’s gone up a lot more than that since it first started.
The market cap for Bitcoin has grown to over $800 billion, and that accounts for more than 30% of all cryptocurrency value in totality. However, given this huge size, the rate of appreciation for Bitcoin could cool down and lead to a bear market should investors start dialing down their enthusiasm for it.
Other opportunities for value are presenting themselves in the larger cryptocurrency arena. One such potential value is Palantir Technologies. This data analytics company is launching Foundry for Crypto. In fact, the stock for Palantir might actually do better than Bitcoin throughout 2022, for several good reasons.
Will Bitcoin Finally Slow Down Some?
Since its inception, Bitcoin is up nearly 30,000%. Early investors obviously enjoyed quite a treat. The price of it has gone up by a factor of six in the last 24 months, but it’s only risen 20% in the last 12.
Bitcoin hit its all-time high towards the end of 2021, and predicting cryptocurrencies involves a lot of guesswork. Unlike stocks, there are no free cash flow reports or earnings to judge as metrics for proper stock value. Cryptocurrencies are simply just supply and demand.
Bitcoin’s current negative price momentum could give investors pause. After two years of serious price action, they might assume that 2022 is going to be soft for cryptocurrencies.
Bringing Order to the Wilderness
Cryptocurrencies are undeniably popular. There are many reasons why. One of them is their use of blockchain technology, a public ledger that tracks every transaction. These currencies are also decentralized instead of being managed by single parties, whereas a national government might manage its own currency.
Unfortunately, the cryptocurrency arena is often a no-holds-barred space with many scams. Founders might take in money to start a cryptocurrency only to abandon investors and leave them holding the bag. The Foundry for Crypto that Palantir is starting might change this.
Foundry is a data platform selling software as a service. Users can utilize this to make actionable and informed decisions based on a combination of data, model building, analytics, mapping, and tracking. In an area where regulation and security are scarce to nonexistent, the possibilities for Foundry are immensely valuable.
Palantir Might Fly This Year
Bitcoin is far from the only thing dropping off after a serious run. Looking at recent history, the stock for Palantir has also seen struggles in a broader market dump of tech stocks. Palantir shares are close to their 52-week lows having dropped from $45 down to less than $17.
Free cash flow for Palantir has turned positive in the last year, and the price-to-sales ratio went down. Company revenue has grown while share prices dropped. This reduced stock valuation might be a tremendous buying opportunity.
Palantir might stand to benefit if the market starts opening its arms to quickly growing businesses once more. The improving financials and specific signs of ongoing growth in the coming quarters bode well for this particular company.