Bitcoin’s price may be down now, but experts still believe that it will reach $100,000 eventually. They think that it’s only a matter of time, not if. In the meantime, Bitcoin is still fluctuating near the $30,000 mark. This is due to sell-offs in both traditional markets and cryptocurrencies. However, the long-term outlook for Bitcoin remains positive. So, even though things might be rocky right now, there’s still reason to believe that Bitcoin will reach new heights in the future.
Investors are closely watching inflation, geopolitical tensions, and the changes in the monetary policy of the U.S. Federal Reserve. The crypto market has become increasingly intertwined with global economic factors, making it even more volatile. In recent months, we’ve seen the price of Bitcoin and other cryptocurrencies fluctuate widely in response to news events.
Bitcoin volatility is nothing new. But with no end in sight for the pandemic or the economic crisis it has caused, experts say that bitcoin’s price is likely to be volatile in the weeks and months ahead. Other factors like the war, inflation, and shifting monetary policy in the U.S. will likely make the digital currency see even more ups and downs in the foreseeable future.
“It’s been a tough week for markets worldwide,” said Edward Moya, senior market analyst at foreign-exchange brokerage Oanda. “It’s all about inflation and how central banks will respond.” Some experts believe that the recent difficulties experienced by TerraUSD (UST), one of the largest stablecoins, may have played a role in last week’s Bitcoin crash. This is just one more example of how volatile the markets have been lately.
Stablecoins are digital assets pegged to a fiat currency or other investment. This means that they should maintain a stable value regardless of the fluctuations in the underlying asset. One of the most popular stablecoins is USDT, pegged to the US dollar. However, this coin has come under fire recently after it sank to as low as 12 cents leading to a significant market sell-off. This led to the Terra blockchain officially halting.
“I don’t know how long the crypto market will continue to tank, but we are getting close,” said Moya. “The last few weeks have been very volatile with the stable coin chaos emerging one after another and many traders nervous about their future.”
Bitcoin has been having a tough few months, and it has struggled to maintain its value above $45,000. The digital currency fell to a six-month low of $34,000 in late January and has yet to recover its all-time high of $68,000 in November. Bitcoin’s price may be down from its all-time high, but it is still up significantly from a few years ago. For Bitcoin, these kinds of ups and downs are nothing new. Despite the recent decline in price, Bitcoin is still more than twice as valuable as it was just a couple of years ago.
Bitcoin’s price has been on a rollercoaster ride over the past few years, and experts are divided on where it will go next. However, a recent study by Deutsche Bank found that about a quarter of Bitcoin investors believe prices will be over $110,000 in five years. So, despite the volatility, many still believe that Bitcoin is on its way to big things.
Experts say that new crypto investors should be highly cautious when allocating part of their portfolio to cryptocurrency, but even the most volatile assets have seen impressive gains. Bitcoin has shown as steady a rise in value over the years if it’s compared with other coins on this market–and it’s only reasonable for those who invest wisely would want to know how high they can ultimately go! Bitcoin has always been a complex asset to predict and even more susceptible than other established classes.
Expert Price Predictions For Bitcoin
Bitcoin has been on a rollercoaster lately, with prices fluctuating wildly. Some experts predict that it will hit $100K by end-2022 while others say crypto’s biggest bubble yet could lead to an even lower finish than before, going as low as $10,000 in 2022. Kate Waltman, a New York-based certified public accountant, specializing in crypto, stated that “the most knowledgeable educators” predict $100k Bitcoin by Q1 2022 or sooner.
The rise in popularity of cryptocurrencies has been due to the increasing number and variety. Some experts are now rethinking this entire industry, as major corporations like Nike look at how they can make money through blockchain technologies such as digital assets or smart contracts for their products within a virtual world called ‘The Metaverse.’ The metaverse contains games, worlds, experiences, and products that have increased altcoins’ popularity and are changing investors’ sentiments about bitcoin.
Experts are hesitant to predict the price of Bitcoin, but many point out that it has been increasing in value over time. It’s expected this trend will continue with $100K looming near- according to Jurrien Timmer from Fidelity Investments last October.
Kiana Danial, founder of Invest Diva and author of “Cryptocurrency Investing For Dummies,” shared her predictions for Bitcoin, saying that the short term will be volatile with high growth potential long-term.
Ian Balina, an American crypto investor and founder of the research company Token Metrics said that Bitcoin could go up to $100k-$150k in 2020, but it’s unclear when this will happen. It is difficult to say when Bitcoin will recover, but the release of new altcoins and hype about metaverse may help fuel its demand in the coming months.
Matthew Hyland, a Technical analysis and blockchain data analyst, predicted that Bitcoin could reach $100,000 in 2022. He attributes it to the new demand for altcoins and the ongoing trend of Bitcoin supply leaving significant exchanges.
Robert Breedlove, the founder and CEO of the marketing of the digital assets and consulting firm Parallax Digital predicted $307,000 by October 2021 and $12.5 million by 2031
Because of inflationary pressures after COVID-19, which would drive interest in cryptocurrency, pushing the value of Bitcoin up higher than previous projections.
Major financial institutions also offered their predictions: JPMorgan has predicted a long-term high of $146,000 for the currency, while Bloomberg has suggested it could reach $400,000 if it continues to climb at rates similar to the past.
Factors that are driving Bitcoin’s price
Acceptance as a currency and investment
The rate at which new consumers buy and explore cryptocurrency is increasing rapidly. “Crypto technology is being adopted faster than humans first adopted internet technology,” she says. According to Waltman, this rapid adoption rate could continue to push the value of Bitcoin higher and higher.
Bitcoin adoption is increasing at an alarming rate. According to data from the digital asset management firm CoinShares, Bitcoin adoption has increased by 113% annually. This is an awe-inspiring feat, especially when you compare it to the rate people adopted the internet – only 63%. If people continue to adopt Bitcoin at a similar rate to the early days of the internet, then we could see 1 billion users by 2024 and 4 billion users by 2030. This would be a massive increase in the number of people using Bitcoin and would have a huge impact on the world economy.
The demand for cryptocurrency appears to rise, with a 45% increase in new wallets being created from January 2020 to January 2021. This is according to CoinDesk, which reported that an estimated 66 million people now own some form of cryptocurrency.
Government policies toward cryptocurrencies
Federal officials have recently taken a keen interest in crypto. This increased scrutiny from federal authorities is one of the key drivers behind Bitcoin’s lagging price in recent months.
In a recent CoinDesk First Mover interview, Seth Ginns, a CoinFund managing partner, highlighted this trend. He said that “the Feds moves could have increased doubt in crypto as a viable asset.
The cryptocurrency industry is still waiting for more clarity on regulation from the U.S. government. President Joe Biden recently signed an infrastructure bill that requires all crypto exchanges to notify the IRS of their transactions. This is a positive step towards greater transparency and accountability in the crypto space. Treasury Secretary Janet Yellen recently said stablecoins should also be subject to federal oversight.
In other countries, regulators have taken a variety of approaches. In September 2021, China country banned crypto, causing the price of Bitcoin to drop. However, it has since risen and resumed its usual volatility. Others, like Japan, have recognized Bitcoin as a legal payment method. The United States has taken a more hands-off approach, allowing exchanges to operate under state money transmitter laws. The lack of clear regulations creates uncertainty, leading to volatility in the prices of cryptocurrencies. It also makes it difficult for businesses to comply with the law.
The industry white paper published by Flourish recommends that regulators take a coordinated approach to creating clear and consistent regulations. It also calls for more research on cryptocurrency’s potential risks and benefits. Cryptocurrency is a new asset class, and regulators need to take a coordinated approach to create clear and consistent regulations. This will help reduce uncertainty and volatility and make it easier for businesses to comply with the law.
The 4-Year Bitcoin halving cycle
Bitcoin halvings are another significant influence on Bitcoin’s price. Halvings occur every four years and result in the reward for mining Bitcoin transactions getting cut in half. This influences the rate at which new coins enter circulation, impacting the value of existing Bitcoin holdings.
Halvings have historically correlated with boom and bust cycles. Some experts try to predict these cycles down to the day after a halving event concludes. However, predicting the exact effect a halving will have on Bitcoin’s price is difficult, if not impossible.
Tokenomics
Bitcoin’s scarcity is one of its key appealing factors for many investors. With only a finite number of Bitcoin in circulation and no more being created, the cryptocurrency is seen as a valuable commodity. This limited supply coupled with increasing demand means that Bitcoin’s price is likely to continue to rise. “There’s a fixed supply but increasing demand,” according to Alexis Johnson, president of the blockchain public relations and events company, Light Node Media.
Essentially, people are willing to pay for Bitcoin because they believe that others will be willing to pay for it in the future. This creates a self-fulfilling prophecy of sorts and is one of why Bitcoin has been so successful. While there is no guarantee that this trend will continue, as long as enough people believe in Bitcoin, the price will likely increase. Nelson Merchan, Johnson’s Light Node Media co-founder, says that this is because people give it value. “That’s really why everybody’s buying — because of the psychological aspect.
So what?
When it comes to investing in Bitcoin, or any cryptocurrency, it’s important to remember that these assets are still very volatile. Their prices can fluctuate wildly from day to day and even hour to hour. As such, it’s essential not to invest more than you can afford to lose.
Financial planners and other experts generally advise against letting Bitcoin’s price fluctuations lead you to emotional decision-making. Studies have shown that investors who regularly contribute to passive index funds and ETFs perform better over time, thanks to dollar-cost averaging.
Dollar-cost averaging simply means investing a fixed sum of money into an asset regularly, regardless of the asset’s price. By doing this, you average out the cost of buying the investment over time, which can help protect you from losses if the price falls in the short term.
Experts recommend not investing more than 5% of your overall portfolio in cryptocurrency and never investing at the expense of saving for emergencies and paying down high-interest debt. You can help protect yourself from making emotionally-driven investment decisions that could jeopardize your financial future by following these guidelines.
“It’s OK to wait and see how things unfold before putting your money on the line,” says Sarah Catherine Gutierrez, a certified financial planner based in Arkansas. “We only have about ten years of data to inform crypto price predictions, and the value of Bitcoin – while potentially climbing long-term – is highly volatile from day to day.”
That doesn’t mean you have to sit on the sidelines if you’re interested in investing in cryptocurrencies. But Gutierrez suggests taking a cautious approach, slowly dipping your toe in the water instead of diving in headfirst. “Start with a small amount of money that you’re comfortable losing,” she says. “And always remember that investing is a risk. There’s no guarantee you’ll make money.”
Bitcoin and other cryptocurrencies can be incredibly volatile, making it hard to know what your investment strategy should be. Before investing in Bitcoin or any alternative assets, ask yourself what you want to achieve from participating in this market. That will help you stay focused. “I don’t think people understand how to value Bitcoin across the board,” says Gutierrez. “When you’re buying it, you need to know your expectation of what value you will get from what you’re buying.”
Bitcoin might be all the rage these days, but that doesn’t mean it’s right for everyone. You might be better off without it when it comes to financial planning. According to certified financial planner Liz Gutierrez of Acorns, while there’s no bias against cryptocurrency among financial planners, it’s not necessarily a wise investment for the average person.
“Our take is that we don’t think you need Bitcoin to reach financial goals,” she says. “In most cases, the answer is no,” Gutierrez says that the average person should favor simple ways of investing that are easy to understand. This will keep you on track for core financial goals and better position you long-term for a healthy retirement.
Volatility Still a Huge Concern – Diversification is Key
Despite all the optimistic projections for Bitcoin above, one thing is clear; no one can definitively say they know how Bitcoin will trade in the future. If past volatility is anything to go by, Bitcoin can always go lower than today and stay depressed for long periods.
So, how do you protect yourself from this volatility? Simple, diversification. While you need to diversify your assets outside of cryptocurrency, it is also possible to diversify within crypto safely. One way to do this is to go for cryptocurrencies backed by real-world physical assets.
One such cryptocurrency is the AABBG token. This is a new cryptocurrency that is backed by real solid gold. This means you enjoy relatively lower volatility relative to the rest of the market while also benefiting from the time-tested upward trajectory of gold prices. AABBG also has a wallet, so you do not worry about storage. To learn more about AABBG and how you can use it to diversify your crypto portfolio, check out their website, including a link to their wallet.
