Bitcoin hit its all-time high price mark last month at $68,000 and by December it touched $46,000. Bitcoin started this year just under $30,000 and it’s price is so volatile that no one can imagine where it will stand after five minutes. This month, its price flipped between the ranges of $58,000-46,000. It started the week at $50,000 and just by the end of week it was down.
No matter how much its price fluctuates the experts opine that it will reach $100,000 in value. The price fluctuation has existed everywhere, and the experts have a variety of opinions regarding this, there is an advise for all those new investors who want to venture into BTC, need to know the borderline realities it comes with.
There’s no denying the fact that Bitcoin has achieved all its milestones that it started for, 10 years ago still the investors need to understand the reasonability behind it. Like every other asset it fluctuates, the only difference is its volatility is more frequent. But the hope is there.
It’s next to impossible to predict Bitcoin’s price, however, all cryptocurrency investments come with a greater risk, yet this coin has peak unpredictability. We can monitor the factors about all the investments that affect its price, BTC has become quite an exception in this regard as well. The factors may not affect its price as they seem to be, keeping in mind its current volatility.
Despite that, the experts have given it their best guesses keeping in mind all factors that affect its price change.
Bitcoin Price Prediction – Road to $100,000
Many experts have targeted 2023 the year when Bitcoin will reach the $100,000 price mark. Others believe it will see a big bullish trend sooner than that. “The most knowledgeable educators in the space are predicting $100,000 Bitcoin in Q1 2022 or sooner,” says Kate Waltman, who specialises in cryptocurrencies and is a New York-based certified public accountant.
There are many other investment specialists, who expertise in assets and investment fund management, “they are too hesitant to pick a specific time-frame.”
“What I expect from Bitcoin is volatility [in the] short-term and growth [in the] long-term,” says Kiana Danial, the author of “Cryptocurrency Investing For Dummies.”
A whole lot of cryptocurrency experts have a varying opinion about its growth and $100,000 price gain threshold. We have mentioned below some of the predictions made by the experts who hail to the different fields of investments but are somehow related to cryptocurrencies.
Ian Belina who is not just the founder of Token Metrics but a Bitcoin investor, predicted Bitcoin price will reach $75,000 by the end of 2021. Furthermore, the data analysis shows, BTC can reach $100,000 but Balina told NextAdvisor that he is willingly predicting it from a conservative point of view.
Matthew Hyland, who is a blockchain data analyst predicted earlier that Bitcoin will reach $250,000 by January 2022. He revealed in his tweets that Bitcoin’s $100,000 price mark threshold is out of question and it will have a euphoric bull run. Hyland further points to BTC’s Bull run, the 150% price-rise in 2017 where Bitcoin rose from $8,000 to $20,000 right after Thanksgiving and has never went down to that price value since then.
Robert Breedlove who is the CEO of Parallax Digital a consulting and digital asset marketing firm, predicted earlier in 2021 that the price of Bitcoin will touch the price mark of $307,000 by October 2021 (of course it did not happen) and $12.5 million as soon as 2031.
It was the time of COVID-19 and he believed that the COVID situation will propel the price of BTC at a much higher rate than it was before that. He also pointed towards Bitcoin’s event of “halving” which sparked changes in Bitcoin’s reward system to the miners.
These were a few crypto-related experts that predicted Bitcoin’s price hype. There are other financial institutions which have their own set of opinions regarding the rise of Bitcoin’s price value.
What Causes Bitcoin’s Price Change–Rise or Drop?
There are many factors that affect Bitcoin’s price rise like other investments. Some of the factors that affect prices of overall assets are mentioned below:
- supply and demand cycle change
- Public Sentiment
- The News Cycle
- Different Market Changes
- Undersupply etc.
There are other few factors that affect the price change of cryptocurrencies because they are new emerging assets much more than any other financial asset. We have discussed below the factors affecting the price change of cryptocurrencies.
Undersupply of Bitcoin
We all know that there are 18-19 million Bitcoins already in supply and the time 21 million Bitcoins are mined, the mining will stop. This will create a scarcity of Bitcoin leading to its price rise like never before. The experts like the idea of forced scarcity. However, we know that a big chunk of Bitcoins is already missing due to deaths of the holder, lost wallets and several others. The number is still unknown which creates a void and is hard to identify unless all the Bitcoins are mined.
“There’s a fixed supply but increasing demand,” says Alexis Johnson, president of the blockchain public relations and events company, Light Node Media.
There are still many other experts who also belong to asset management and different financial institutions, they believe Bitcoin has value because of the people’s perfection of its high value that they are giving it. The psychological aspect is making people buy it. “That’s really why everybody’s buying — because of the psychological aspect,” says Nelson Merchan, Johnson’s Light Node Media co-founder.
The phenomenon makes it difficult for an average office going person to decide whether or not the cryptocurrencies are legit. Just the economics’ factors of Supply-Demand events make people buy something which is undersupplied.
There are many average guys who invested in cryptocurrencies a few years ago and saw their asset portfolios swell to millions. However, they also see their cryptocurrency values plummet in a much lesser time than that due to high volatility. There are other average people who believe if it’s not in your pocket and is stored in a digital wallet that means it’s not money. So it’s better to just allocate 1% to 5% of your investments to cryptocurrencies.
Utility of Bitcoin
There are many factors that are driving the price of Bitcoin to the moon. It’s alarming to see how many new people are exploring cryptocurrencies which have nothing to do with mining or anything related to them. We see people are adopting cryptocurrencies at a much higher rate than they were accepting internet technology. So this compounding factor is also pushing the price of Bitcoin.
Just last month CoinDesk reported that the number of new registered wallets has dramatically increased 45% globally from what was in January 2020-2021, to an estimated 66 million.
CoinBase, the most popular cryptocurrency exchange claims its users have increased to over 73 million worldwide which is a huge development which was very low in the years before that.
Another cryptocurrency exchange Gemini reported to the “State of U.S. Crypto Report,” which found 21.2 million Americans own different types of cryptocurrencies or some kind of cryptocurrency.
The acceptance of Bitcoin as a valuable asset is rising every year. According to digital asset management firm CoinShares “at an annual rate of 113% while the internet adoption was much slower than that at 63% annually.” If it continues that way by the end of 2024 the number of cryptocurrency users will rise to 1 billion and to 4 billion by 2030.
Federal Regulatory Measures
The US federal department is all ears and eyeballs to cryptocurrencies. They have made it clear that the cryptocurrencies are under their radar. As President Joe Biden his signed a Bill that requires all cryptocurrency exchanges to notify IRS about the transactions that take place on each exchange.
While the Treasury Secretary Janet Yellen commented that –stablecoin which are pegged to USD need to be overseen by the federal officials.
Many cryptocurrency related tabloids have made it clear through their researches that the new asset class like cryptocurrency will directly get affected by the regulatory measures. The change could make its price rise or fall, it can work both ways.
We all saw in September 2021, how Bitcoin’s price instantly plummeted as China pulled off all its miners and banned any type of cryptocurrency usage in the country. The price of Bitcoin dramatically dropped.
Algorithm of Bitcoin
The algorithm of Bitcoin appears very complicated when we hear the terms ‘halving’ or ‘mining cycles’ for the first time. It signifies the portion of mined Bitcoin reported going into the miner’s wallet as the reward is cut in half by the algorithm to award the miners.
The halving of Bitcoin directly has an impact on the inclusion of new coins in the circulation supply that directly affect the Bitcoins already available in the circulation supply and held by the owners which are not even available for trade offs.
What we need to know about investing in Bitcoin
The financial experts warn the average investors to be cautious while investing and avoid emotional decisions in the case of cryptocurrencies. The Dollar Cost Averaging strategy study shows that investors who contribute to the passive index and ETFs on a regular basis earn more overtime instead of investors whose decisions are made sentimental instead of based on facts.
“Passive investing is a very valid way to achieve financial goals,” says Arkansas-based certified financial planner Sarah Catherine Gutierrez.
Besides, the financial experts push investors to not to allocate more than 5% of their portfolio to the crypto investment is because if you think you are investing in the cryptocurrencies for hard-times ahead and would use them when you need it, it would be very difficult for you as the cryptocurrencies are given to highest fluctuation.
Those investors who invest in a variety of assets, that really pays off in the long run. A diverse investment portfolio is the right road to tread. The investors who have been part of the cryptocurrencies for a longer period believe ‘invest-and-forget-it’ is a better strategy in case of the new asset class–cryptocurrency.