Expert predicts bitcoin price. Last week, Bitcoin’s price fell below $35,000 for the first time since July. That’s a significant drop from the most recent all-time high, which was over $68,000 in November.
Bitcoin is still more than twice as valuable as it was just a few years ago, despite the recent price drop. These types of ups and downs are nothing new for Bitcoin.
Despite the volatility and recent price drop, many experts believe Bitcoin will eventually pass the $100,000 mark, though there are differing opinions on when that will happen. The volatility is nothing new, and it’s one of the reasons why experts advise new crypto investors to be cautious when allocating a portion of their portfolio to cryptocurrency.
Bitcoin has risen in value as steadily as any other cryptocurrency on the market over the years. It’s only natural for Bitcoin investors to wonder how high the currency can rise.
Unfortunately, the price of Bitcoin is extremely difficult to forecast, and it is even more vulnerable to market factors than other asset classes. Nonetheless, we decided to poll some experts for their best guesses. Here’s what they had to say:
Bitcoin Price Forecasts
Coming off its an all-time high in November, a $100,000 Bitcoin price was easy to forecast late last year. With Bitcoin’s steep decline since then, the prediction game has become even more difficult.
The most ardent crypto skeptics predict that Bitcoin will crash to $10,000 by 2022, but a middle ground could be that Bitcoin can still reach $100,000, as many experts predicted late last year — albeit on a slower timeline.
Back in November 2021, Kate Waltman, a New York-based certified public accountant who specializes in crypto, told us, “The most knowledgeable educators in the space are predicting $100,000 Bitcoin in Q1 2022 or sooner.”
But, as major corporations like Nike and other big brands look for ways to monetize their products in the digital metaverse, bullish experts are re-evaluating the crypto industry as a whole. The popularity of altcoins is growing as a result of the rise of metaverse games, worlds, products, and experiences, which has shifted investor perceptions of Bitcoin (known as the original crypto).
Many experts are hesitant to predict a specific number or a specific date, instead of pointing to the trend of Bitcoin’s value increasing over time. Last October, Jurrien Timmer, director of global macro at Fidelity Investments, predicted a “pretty sustainable” rise in Bitcoin’s long-term value, driven by organic market movement, with the $100,000 threshold insight.
Kiana Danial, founder of Invest Diva and author of “Cryptocurrency Investing For Dummies,” says, “What I expect from Bitcoin is volatility [in the] short-term and growth [in the] long-term.”
Here are some more predictions for the coming year, ranked from low to high:
Balina, Ian
Bitcoin investor and founder of Token Metrics, a crypto research, and media company
Prediction: Bitcoin could reach $100,000-$150,000 in the near future, but the timing is uncertain.
Why? Although Bitcoin is in a bearish sentiment cycle, the entire crypto market and other crypto asset classes are not. Although Bitcoin was the first cryptocurrency, others have now surpassed it in terms of innovation in what experts refer to as “Web 3” — the new internet-based on the blockchain. The release of new altcoins and the hype surrounding the metaverse will continue to drive crypto demand, and Bitcoin will eventually recover.
Hyland, Matthew
From the perspective of a technical analyst and a blockchain data analyst
Bitcoin is expected to reach $100,000 in 2022.
Why: The price of Bitcoin in January 2022 is nearly the same as it was in January 2021, but altcoins are seeing a surge in demand. According to Hyland, there is also an ongoing trend of Bitcoin supply leaving major exchanges (presumably to be stored in offline crypto wallets). He also recently tweeted that a drop below $40,000 could trigger a “free fall” into a bear market for Bitcoin.
Breedlove, Robert
Point of View: Founder and CEO of Parallax Digital, a digital asset marketing and consulting firm.
$307,000 by October 2021 (now passed), and $12.5 million by 2031
Why: After COVID-19, inflationary pressures will drive interest in cryptocurrency, pushing Bitcoin’s value higher than previous projections, according to Breedlove, who said in an interview earlier this year. Breedlove, who is known among crypto enthusiasts as more of a philosopher type, speaks frequently about the broader social implications of crypto as a form of more transparent, decentralized currency—but his price predictions haven’t always been accurate.
Big financial institutions have also made predictions, with JPMorgan predicting a long-term high of $146,000 and Bloomberg predicting it could hit $400,000 if the currency rises at past rates.
What Factors Affect Bitcoin’s Price
Supply and demand, public sentiment, the news cycle, market events, scarcity, and other economic factors all influence the price of cryptocurrency, just as they do any other currency or investment.
Bitcoin’s value is influenced by more factors than the average currency or security because it is a new and emerging asset. Here are a few examples:
Scarcity
There are only 18 to 19 million Bitcoins in circulation right now, and production will cease at 21 million. This inherent scarcity, according to industry experts, is a big part of cryptocurrency’s appeal.
“There’s a fixed supply but growing demand,” says Alexis Johnson, president of Light Node Media, a blockchain public relations and events firm.
Other experts argue that Bitcoin is valuable because people value it. “The psychological aspect is really why everyone is buying,” says Nelson Merchan, co-founder of Johnson’s Light Node Media. This makes determining whether Bitcoin and other cryptocurrencies are legitimate difficult for the average consumer. The supply and demand concept only works when people want something scarce — even if it didn’t exist before.
When it comes to Bitcoin’s origins, Merchan says, “it almost seems like a scam.” Since starting to invest in crypto in 2017, he claims to have seen his crypto holdings reach millions of dollars at times, but he’s also seen them vanish in an instant.
“If it’s not in cash, you don’t really have that money,” Merchan says, “because in crypto, anything can drop dramatically overnight.” To protect your money from volatility, certified financial planners recommend allocating only 1% to 5% of your portfolio to cryptocurrency.
Adoption in the Mainstream
According to Waltman, one of the main factors driving Bitcoin’s price increase is the rate at which new consumers are buying and exploring cryptocurrency.
She claims that “crypto technology is being adopted at a faster rate than humans first adopted internet technology.” The compounding acceleration of new adoption could continue to push Bitcoin’s value higher and higher, assuming it continues.
According to data from the digital asset management firm CoinShares, bitcoin adoption has been increasing at a rate of 113 percent per year. (People, on the other hand, are adopting the internet at a slower rate of 63 percent.) The report claims that if people warm up to Bitcoin at the same rate as they did to the internet in its early days (or faster), there will be 1 billion users by 2024 and 4 billion users by 2030.
According to CoinDesk, the number of new wallets globally increased 45 percent from January 2020 to January 2021, reaching an estimated 66 million. Coinbase, a popular cryptocurrency exchange, claims to have over 73 million users worldwide, while Gemini recently released its “State of U.S. Crypto Report,” which found that 21.2 million Americans own cryptocurrency of some kind.
Regulation
In recent months, federal officials have made it clear that they are paying attention to cryptocurrency. One key driver for Bitcoin’s lagging price, according to industry insiders, is what crypto insiders perceive as “hawkish” federal regulation. Seth Ginns, a managing partner at CoinFund, said in a recent CoinDesk First Mover interview that “the Fed moved to a hawkish position [on crypto regulation] just as Omicron started to tick up in the US,” which could have raised doubt in crypto as a viable asset, leading to January’s bearish sentiments.
Regulation of cryptocurrency raises a slew of unanswered questions. President Joe Biden recently signed an infrastructure bill requiring all cryptocurrency exchanges to report their transactions to the Internal Revenue Service. Similarly, Treasury Secretary Janet Yellen recently stated that stablecoins — a type of cryptocurrency tied to the value of the dollar — should be regulated by the government.
According to a white paper published by Flourish, a fintech platform for investment advisors, the conversation on regulatory policies is “patchy.” Any new regulation can have an impact on the value of a relatively new asset class like cryptocurrency.
When China banned cryptocurrency in September 2021, for example, investors saw Bitcoin’s price plummet, though it has since rebounded and resumed its usual volatility. Despite the fact that Bitcoin has been around for over a decade, the Securities and Exchange Commission is taking a case-by-case approach to mainstream crypto adoption, which experts refer to as its “crawl, walk, run” strategy.
“Over the last five years, [regulation] has kind of evolved,” says Ben Cruikshank, CEO of Flourish. “Regulators can always change their minds.”
Mining Cycle
Finally, a cycle known as halving has a significant impact on Bitcoin’s price. Although it is complex and algorithmic in nature, halving is a step in the Bitcoin mining process that reduces the reward for mining Bitcoin transactions in half.
The rate at which new coins enter circulation is influenced by halving, which can affect the value of existing Bitcoin holdings. In the past, halvings have been linked to boom and bust cycles. Some experts claim to be able to predict these cycles to the day after a halving event.
What Every Investor Should Know About Bitcoin Price Forecasts
Financial planners and other experts advise against letting Bitcoin’s price fluctuations lead you to make emotional decisions, as they do with any investment. Investors who make regular contributions to passive index funds and ETFs outperform the market over time, according to studies, thanks to a strategy known as dollar cost averaging.
That’s why experts advise investing no more than 5% of your total portfolio in cryptocurrency, and to never invest at the expense of emergency savings or paying down high-interest debt. People who invest in diversified investments like low-cost index funds, with crypto making up a small part of their portfolio, are more likely to build long-term wealth and save for retirement.
Even with crypto, experts recommend taking a set-it-and-forget-it approach. “Passive investing is a very valid way to achieve financial goals,” says Sarah Catherine Gutierrez, a certified financial planner in Arkansas.
Because most people are unfamiliar with cryptocurrency, it’s fine to wait and see how things develop before putting your money on the line. We only have about ten years of data to base crypto price predictions on, and the price of Bitcoin, while potentially rising in the long run, is an extremely volatile day today.
Volatility makes it difficult to understand the “what” and “why” of your cryptocurrency strategy. Before you invest in Bitcoin or any other alternative asset, consider what you hope to gain and why you want to participate in such a volatile market. This will assist you in remaining focused.
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“I don’t think people understand how to value [Bitcoin] across the board,” Gutierrez says. “You need to know your expectation of what value you’ll get from what you’re buying when you’re buying it.”
According to Gutierrez, financial planners do not have a bias against cryptocurrency, especially if a client expresses an interest in learning more about it. However, you should consider whether you require cryptocurrency as part of your strategy. According to Gutierrez, the answer is no in the vast majority of cases.
“Our opinion is that you don’t need Bitcoin to achieve financial goals,” she says, adding that the average person should prefer simple, easy-to-understand investment methods. This will help you stay on track with your core financial goals and put you in a better long-term position for a happy retirement.
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