What Does the Future of Bitcoin Look Like?
The problem with cryptocurrency – and potentially the reason why it is so alluring – is that the future can never be predicted. By nature, the cryptocurrency market is volatile, with a number of external and internal factors that can make prices go up or down.
In traditional trading terms, this kind of asset would prove to be “uninvestable”. When it comes to a traditional stock market, brokers can normally provide some kind of projection on where stocks might be going, when it might get there, and the risks that could threaten its climb. For cryptocurrency, however, much of this is unknowable.
Take the current crypto winter. Just last year, the prices of Bitcoin and Ethereum were sitting at $69,000 and $4,800, respectively, with many crypto experts expecting the mode of travel to only go up. Then came the unpegging debacle in June 2022, where the stablecoin Tether dropped below its $1 peg to $0.95, sending every other coin in the market to tumble in the fallout.
These kinds of events are almost impossible to predict, and, worryingly, it’s not as if they’re uncommon. There have been plenty of changes in the market which have caused coins to either drop or soar, whether it’s the Terra/LUNA de-peg, the federal reserve interest hikes or even the current inflation fears for fiat currency.
Having said that, blockchain users across the world continue to invest in cryptocurrency. Bitcoin, especially, is seeing heavy gains despite its current lull. According to Business Insider Intelligence, it is estimated that there will be more than 25 million Bitcoin owners by the end of 2022, which would ultimately be a 16.7% growth compared to its growth 2021.
Why Are People Investing In Bitcoin?
Despite the market volatility and the inability to accurately predict the future, cryptocurrency remains increasingly popular, with Bitcoin making up the bulk of new investments. This may be because, unlike other coins in the market, Bitcoin has a supply-and-demand system. This means that, although it is hard to predict cryptocurrency’s future, it is possible to predict Bitcoin’s future.
Bitcoin’s supply is predetermined. Creator of the whitepaper, Satoshi Nakamoto, designed the token to act as a digital version of gold. This means that the maximum supply of Bitcoin is capped at 21 million, with a “halving” of the supply taking place every four years.
In this way, despite the fact that the market might have more incidences of unpredictability, Bitcoin’s value is still set to rise. As the quantity goes down – and the popularity of crypto’s ideology goes up – more users will want to invest, and tokens can be traded at an increasingly higher amount.
Bitcoin is also more accessible. Compared to many altcoins on the market, it has more exchanges, merchants, better software and stronger hardware, making it far more liquid and attractive to investors. This makes it more of a stable investment. There is a feeling of security that an investor can attain with Bitcoin and a feeling that, no matter how cold the market gets, there is enough behind the token to keep it functioning.
How Has Bitcoin Faired In 2022?
But is it enough to invest in a coin that’s wider future in the crypto market remains unforeseeable? Well, many Bitcoin investors would argue that they can see glimpses into Bitcoin’s future. Of course, events like the de-pegging debacle are unforeseeable, but Bitcoin’s inherent nature can allow a trajectory to be plotted out.
In 2022, Bitcoin acted in accordance with the bear market. LUNA was worth $116 in April, but one month later, the price dropped to just a fraction of $1, causing a total of $40 billion in investor losses and a massive snowball effect to plough through the market as a whole. Frozen customer accounts in the Celsius Network also caused sudden bankruptcies and the value of the company to fall by 80%. Throughout this saga, Bitcoin fell from $45,538 in March 2022 to $19,784 by the end of June. This was obviously concerning at the time, but what happened in July – just one month later – provided far more optimism.
Bitcoin fell along with the rest of the market during that three-month lull. The second quarter of 2022 was one of the worst years in crypto’s history, resulting in a 55% decline for Bitcoin. July, on the other hand, marked a moment of quiet and clarity. During this time, Bitcoin reverted back on an upward trajectory, climbing to the $20,000 mark and ending the month at just above $24,500. This was 16.8% higher than the June closing price and was its best-performing month since October 2021.
Bitcoin In 2023
That month could be critical when examining Bitcoin’s future. While other altcoins, such as Ethereum or Tether, finished July with a decline, Bitcoin did not. This is despite external factors such as the Fed’s increasing interest rates and Biden’s announcement of the USA’s recession, both of which could have prompted a downward curve.
As mentioned before, It is the supply-and-demand structure that gives it this elasticity. While the market can tug and pull, Bitcoin consistently manages to spring back. In this way, Bitcoin will always be in a strong position, even if market volatility is causing its price to drop or its estimated value to be weakened. When the market stayed still in July, Bitcoin began to climb. Next year, in 2023, if the market starts to strengthen – as it is projected to – then Bitcoin could see even more of a dramatic increase.
Bitcoin’s supply-and-demand nature gives it an edge because it is destined to have more worth as the years go by. Only a total crypto crash would put a stop to that, and with more businesses beginning to embrace crypto-based infrastructures – as well as governments growing more accepting – that is highly unlikely. Even if the market doesn’t surge in 2023, Bitcoin’s next halving is due to take place in 2024, which means a price rise is almost definite. Despite any market turbulence, Bitcoin’s deflationary nature will likely always result in price appreciation for long-time investors. That is why – in terms of future predictions – Bitcoin makes such a desirable investment despite the volatility of the crypto market.
Does This Make Bitcoin The Right Investment?
With all this being said, Bitcoin is not the only coin which can provide a worthwhile investment. Yes, the market is unpredictable, and there are moments of volatility which can put some coins in more long-term peril than others, but with the right trading strategy and keen attention to market fluctuation, alt-coin investors can still make a good return.
But Bitcoin’s position at the top of the blockchain pyramid is not to be underestimated. As of right now, it is far below its previous peak of $69,000, but there are a number of experts who are predicting a post-halving value of $84,000, with a further $200,000 on top of that after the halving of 2028. These are very bullish predictions, however, so they should be taken with a pinch of salt.
The truth is, in a market which is built upon volatility, Bitcoin is one of the few coins which provides an essence of predictability. Or rather, it offers slight glimpses into the future that investors can latch onto and revolve their strategy around. This is why it proves to be a good investment.
Would Bitcoin Be A Good First Investment?
For anyone new to crypto, the question of a good first investment must be thought through responsibly. This is not a market to half-heartedly invest in. If you choose the wrong coin or put too much into one token, then a swing in the market could be very damaging. Although we have discussed Bitcoin’s basic predictability – as well as the fact it could make a good investment – that does not mean that it is right as a starting point.
Despite experiencing a lull in price right now, it still has a higher value than any other coin on the market. In this way, it is a good idea to invest in a smaller altcoin in order to get a feel for the metaverse and practice some trading strategies without the risk of financial damage if those strategies do not work.
What Coins Might Be A Better Investment?
Better first-time coins might include XRP, which is sitting around the $1 mark. It is created by Ripple, and, despite some uncertainty around the company’s lawsuit with the US Securities and Exchange Commission, it has been growing in liquidity during the second quarter of 2022. Dogecoin could also be a good starting investment. Although it started as a joke, tweets by billionaire Elon Musk allowed the coin to grow and become a legitimate token within the cryptocurrency market.
Other possible starting coins include LINK, UNI and ADA, all of which are fighting through the bear market and in a good position to come out strong on the other side. ADA, especially, has an upcoming upgrade – named Hydra – which could dramatically increase the processing feeds and trigger higher prices than it has ever seen before. All of these coins are currently hovering around the $1 mark, meaning they provide potentially lucrative investments – so long as trading strategies are on point – with little risk.
What’s The Best Way To Trade Bitcoin?
If you want to invest in Bitcoin, there are many cryptocurrency trading apps that make the process smooth and easy for new investors. It is important that you examine them all, choose which exchange works best for you and then establish an account with that exchange.
After this is done, you should fund your account with fiat money and choose the token you want to buy – in this case, Bitcoin – and then place a buy order for that token.
What Is The Best Bitcoin Trading Strategy?
One of the most popular trading techniques – especially for those who are looking for a quick and efficient return on their investment – is known as scalping. This involves watching frequent price movements that take place over a short period of time and attaining daily profits with the aim of a substantial future return.
Other investors choose to hodl their tokens, and this is a good tactic if you are looking to buy Bitcoin in particular. As mentioned previously, there are many experts who are expecting Bitcoin’s price to fly over the next decade. Hodling allows an investor to hold onto their assets and focus on a particular value goal. It does, however, require patience and appropriate risk management. Other trading strategies include swing trading, day trading and arbitrage trading. Make sure to learn each technique and surround yourself with other traders who can give you advice and help you to understand the complexities of the market.
Is Crypto Truly The Future Of Finance?
With the world becoming steadily more digitised – as well as an increasing appetite for decentralisation and control of one’s own funds – it is likely that cryptocurrency will become far more embedded in our lives sometime in the near future. Governments across the world are working on regulations to make blockchain projects and coins more secure and stable, which could help hesitant users transition further down the line.
That isn’t to say that every government is inclined to support crypto, however. Many are working on their own digital coin, which would be assigned to a centralised bank. This takes away the ideology of decentralisation that crypto was built on, so it remains to be seen whether this move will manage to compete with the crypto concept, but it is unlikely. The world is hungry for change, and cryptocurrency offers the upgrade that they are looking for. It is more likely, then, that crypto will rise above government counterparts and have its biggest impact after the introduction of Web3, which is expected to happen around 2030. Of course, the future is hard to predict. But coins like Bitcoin are not going anywhere anytime soon. In fact, they’re only just beginning.