After an impressive gain in 2021, Bitcoin – the world’s first cryptocurrency – took a staggering hit earlier this year, along with the rest of the cryptocurrency market. In November of 2021, Bitcoin’s highest price exceeded $68,000. Just months later, by January of 2022, the price of Bitcoin plummeted by over 50%, to around $30,000.
At the time of writing this, in June of 2022, Bitcoin’s market price remains in the $30,000 range. Recent events have left many industry analysts asking the same question; what’s next for bitcoin?
Not If, But When
If you ask the bulls of the cryptocurrency market, the recent slump was nothing more than a small road bump on the road to riches. Despite recent events, many are still optimistic that Bitcoin is still headed towards $100,000. For them, it’s not a matter of if Bitcoin gets there, rather when it does.
Bitcoin’s Broken Promises
Still, it’s necessary to point out that Bitcoin, and other cryptocurrencies, have fallen short of their grand plans. For instance, the promise of a decentralized digital asset was always that it would be free of traditional market forces.
However, market data has proven repeatedly that cryptocurrency is more beholden to traditional market forces than we’d like it to be. As Bitcoin’s price rises and falls in the wake of strained geo-political relations, rising inflation rates and changing monetary policy, cryptocurrency has learnt the hard way that it doesn’t exist in the bubble it once claimed it did.
The Future Outlook of Bitcoin
Even amongst the bulls of the cryptocurrency market, there seems to be some disagreement as to when Bitcoin will hit $100,000. Deutsche Bank conducted a survey that suggested most investors believe Bitcoin will hit 6 figures by 2027.
Others are far less optimistic about the future of Bitcoin. The most bearish investors on the market have expressed fears that Bitcoin could continue to fall dramatically over the second half of 2022, going as low as $10,000, a mere fraction of Bitcoin’s highest price.
Moderate investors choose to believe that Bitcoin’s future lies somewhere in the middle. The reasonable prediction is that Bitcoin will continue to rise slowly. Although it’ll eventually reach $100,000, most investors believe it won’t be within the next 5 years.
The Emergence of The Metaverse
Ever since Mark Zuckerberg first started talking about the Metaverse last year, the cryptocurrency market has been abuzz with predictions of what a future on the Metaverse could look like. Many different players in the industry have already tried to establish a name for themselves as pioneers in the Metaverse, to varying degrees of success.
Just recently, Bored Ape Yacht Club announced Otherside, a Metaverse project that would allow Bored Ape NFT holders to use their NFTs as custom avatars in BAYC’s virtual world.
The Future of Bitcoin in The Metaverse
As we get closer to an interconnected future on the blockchain, many investors have been left to wonder what role Bitcoin will play in the Metaverse. As the market grows, we see new blockchain related products emerging every day; from dApps to video games, virtual worlds and all kinds of other products and services.
Most of these blockchain ventures use altcoins such as Ethereum, or offer their own unique tokens. As various altcoins find practical applications on the metaverse, Bitcoin investors are left with concerns that the world’s first cryptocurrency could find itself becoming irrelevant.
Expert Predictions About Bitcoin
In January of 2022, analyst Matthew Hyland pointed out that the price of Bitcoin at that time was very close to the price of Bitcoin in January of 2021. Hyland added that many altcoins were seeing a rise in demand, and that more Bitcoin was being held in crypto-wallets than being actively circulated on the market. With all these factors in mind, Hyland seemed to believe that Bitcoin would freefall into a bear market.
Founder of Token Metrics, Ian Balina believes that the price of Bitcoin could reach between $100,000 and $150,000. His prediction, although optimistic, stops short of providing a specific timeline of when Bitcoin could reach this price. Balina is of the opinion that a rising tide lifts all ships. He seems to think that the rise of Web 3 and a growing cryptocurrency market will drive the market demand for Bitcoin forward.
CEO of Parallax Digital, Robert Breedlove once bullishly predicted that Bitcoin would reach a remarkable $307,000 before the end of 2021. Of course, this future never came to pass. His long-term prediction is that Bitcoin will see a price of $12.5 million by the year 2031.
In the early days of 2022, Breedlove suggested that rising inflation rates would encourage growing interest in cryptocurrency. Most investors take Breedlove’s predictions with a grain of salt, as he doesn’t have a great track record.
Even major Financial Institutions have offered their own predictions for the future of Bitcoin. JP Morgan predicts that Bitcoin could eventually reach $146,000, but refrains from saying when. Bloomberg has predicted that should Bitcoin return to early growth rates; it could reach $400,000 in a matter of years.
Factors That Will Influence the Future of Bitcoin
In order to make an educated guess as to the future of Bitcoin, it’s important to know the specific market factors that have influenced the behavior of the cryptocurrency so far. For starters, Bitcoin has shown to be influenced by similar market forces that drive the prices of fiat currencies; such as supply and demand. That being said, there are other factors that tend to influence Bitcoin in very specific ways.
The number of Bitcoin tokens that will ever exist is capped at 21 million. So far, over 18 million have already been mined. What this means is that the supply of Bitcoin is fixed, but the demand for the token can rise freely. This relationship between a fixed supply and unlimited demand will continue to push the price of Bitcoin higher year after year.
Cryptocurrency expert Kate Waltman points out that the current rate of adoption for Bitcoin is in fact higher than that of the internet at this point in its lifespan. She believes that if this rate of adoption accelerates, it will continue to push the price of Bitcoin forward in the long term, even in the face of temporary market slumps. At the current rate of adoption, there will be 1 billion Bitcoin holders by 2024, and 4 billion by 2030.
Perhaps the most unpredictable factor affecting Bitcoin has been how government bodies choose to react to it. It’s no secret that most governments around the world have been skeptical of a decentralized digital currency. In fact, China outright banned the trade of cryptocurrency last year.
On the other hand, Bitcoin has been accepted as legal tender in regions such as the Central African Republic and El Salvador. Already, market experts are speculating upon which countries will be next to embrace Bitcoin. As more countries do so, we should see the price of Bitcoin rise faster year by year.
What To Know Before You Invest
As a cryptocurrency that has exhibited short term volatility but long term stability, Bitcoin is not a token for the impatient investor. If you’re looking for a quick, easy buck, you’re better off investing in smaller altcoins. For those investors looking for a long-term asset to invest in gradually, and see rising returns year after year, Bitcoin is probably your best bet.
As always, be responsible while investing, and make sure to educate yourself as much as possible. If you’re waiting for the perfect time to invest in Bitcoin, that time will always be right now.