Cryptocurrencies and the oldest, most traded and most valuable of them all – Bitcoin – make and break fortunes in the investment world.
From an obscure digital start, Bitcoin has grown to become the market-leading cryptocurrency and a household name around the world.
With mortgage lenders in the US and UK heralding the development of bitcoin loans and El Salvador adopting the currency as legal tender, albeit off to a bumpy start, as Reuters explains, it looks like cryptocurrencies will stay here.
So is Bitcoin still a worthwhile investment or does the stratospheric appreciation mean you’ve missed the boat if you haven’t already shopped in?
And can Bitcoin really continue an upward trend over the next ten years?
Here’s a look at the conflicting predictions made by cryptocurrency experts to gauge where Bitcoin could go next.
How price shocks rock Bitcoin
In order to grasp the potential value of a cryptocurrency, we first need to determine what factors are changing the price of Bitcoin.
Investment research tool YCharts reports that a single Bitcoin is worth about $ 51,669 (£ 38,068) – that’s a 15 percent increase in three weeks but a two percent decrease from the previous month, so it’s clear the value of bitcoin is not stable.
Here are the most important factors:
- Supply and Demand – Where demand increases, prices increase
- Circulation Caps – There is a limit to the amount of Bitcoin in circulation, which is currently set at 21 million. With 18 million coins already mined, there will be no new coins when the upper limit is reached
- Competition – Bitcoin is one of thousands of cryptocurrencies, and while it is the undisputed leader, it has competitors
- Production costs – about every ten minutes a new batch of Bitcoin is generated by a computer algorithm. Bitcoin mining is very competitive and involves solving complex math equations. The longer it takes to win the ticket, the more expensive the process and the more competition there is
- Currency Exchange Availability – Bitcoin’s value revolves around forex exchanges like GDAX and Coinbase. Platforms need to offer rate consistency and therefore need to manage Bitcoin to some extent.
Another major element affecting value is regulation that governments around the world are grappling with due to the innovative nature of cryptocurrencies. Cryptocurrencies exist online without any guidance from governments or central banks.
There is a lot of uncertainty in Bitcoin trading and for many, trading remains a gray area. Any regulatory changes could have a dramatic impact on the value of the cryptocurrency.
Bitcoin price history
Bitcoin didn’t start out as a global player and saw its first significant price spike in 2011. Bitcoin started the year valued at around $ 1 per coin.
The currency jumped to $ 32 per bitcoin in six months and fell back to $ 2 in November.
These wild fluctuations continued with sudden increases in value, which were offset by corresponding decreases due to events such as the economic recession.
Coming December 2015; one bitcoin was worth $ 20,089.
The boom had really started when investment analysts began to anticipate potential value and examine the prospects for alternative cryptocurrencies as they vie for market share.
Was the COVID-19 Pandemic the Great Global Event That Changed Bitcoin’s Fortune?
When the virus trampled the world, financial markets stalled, and economies stalled, Bitcoin came to life.
Fears of inflation and falling US dollar values led large companies to decide to buy into Bitcoin, which drove the currency to unbelievable heights.
In 2020 alone, Bitcoin values soared an incredible 224 percent, and while 2021 will remain a period of highs and lows, it is now worth around the $ 40,000 to $ 50,000 mark.
What does the future hold for Bitcoin?
It is difficult to make an accurate analysis of how Bitcoin will perform in the next few years as it depends on who you are talking to.
- As reported by Blockchain News, Jeremy Liew, who recently announced he is stepping down from investments as the face of Lightspeed Venture Partners, predicts the cryptocurrency will be worth $ 500,000 per coin
- Ask the Winklevoss twins (Bitcoin billionaires) and they’ll endorse the $ 500,000 theory that makes Bitcoin as valuable as gold as a global resource
- In an interview with Forbes, Mark Yusko, the billionaire investor and founder of Morgan Creek Capital, put Bitcoin’s value at over $ 400,000 in 2030.
The difficulty here is that given the uncertainty about the future of the next nine years, an absolute judgment is not possible.
Skeptics believe that Bitcoin is a bubble and will burst in the next decade, rendering current investments worthless.
Much depends on market attitudes and whether or not confidence remains that more governments and business leaders will embrace this alternative store of value in place of conventional assets like gold.
The advantage of investing in Bitcoin, and indeed any non-currency commodity, is that it provides a hedge against inflation.
If Bitcoin continues to grow on this rocky road of steady gains, it could prove to be more valuable than gold by 2030, with returns you won’t find anywhere else.
What will Bitcoin be worth in 2030? FAQ
What is bitcoin
Bitcoin is the leading form of cryptocurrency – a currency that only exists online as a virtual or digital asset. You can’t buy a physical bitcoin, only a digital representation.
Bitcoin works just like any other currency, however, and you can use it in more and more places to spend money or receive payments.
New bitcoins are generated through mining, where users process transactions through specialized hardware and collect new coins when they solve a complex problem.
Coins are produced at a fixed rate, although this is not infinite as there is a limit of 21 million circulation, of which 18 million are already in circulation.
It is worth noting, however, that it is expected to take over 100 years for the Bitcoin network to produce the final token.
Since miners will likely spend years obtaining a tiny fraction of the final bitcoins, a dramatic decrease in the rewards available can lead to significant changes in the mining process.
How safe is it to spend Bitcoin?
In essence, every bitcoin is a computer file. When you spend or receive bitcoin, the file changes ownership of a central database called the blockchain, which is stored on a network of peer-2-peer computers.
Every Bitcoin transaction is stored on the blockchain, which is open to all users.
This means that you cannot spend any bitcoins that you do not own as the transaction can be traced back to the individual PC or phone and the exchange can be reversed by giving the valid owner the unique ID codes called keys identify.
Is Bitcoin a Regulated Currency?
Bitcoin offers traders and investors more flexibility because the Bitcoin economy is decentralized and not controlled or managed by any regulator or management structure.
However, this freedom is also one of the greatest challenges as many countries do not allow Bitcoin trading as they have no control over how the cryptocurrency is spent.
In some places it’s even banned while others are adopting cryptocurrencies as legal tender and you can soon buy a house or take out a mortgage based on your Bitcoin account value.
This scenario is unique and means that a large part of the future value of Bitcoin depends on how widely it is accepted and whether regulatory structures are in place.
What are the long-term predictions for Bitcoin value?
Assessments of the future of Bitcoin vary among experts, most of whom made sizable personal fortunes by buying the cryptocurrency in the early days – and they have a lot to gain by approaching the market.
Estimates of Bitcoin value by several figures in authority in the cryptocurrency world range from $ 500,000 to over $ 1 million, so anyone can guess who will prove to be correct.
However, it’s worth reconsidering previous predictions to see how close they were to the mark.
• Tim Draper, the multi-billion dollar venture capitalist, and Mike Novogratz, bitcoin investor, estimated a valuation of $ 10,000 as of 2018 – and they were both right.
• Ronnie Moas, the founder of Standpoint Research, reported roughly $ 50,000 by 2027, and Bitcoin has already hit that level.
Other calculations turned out to be a little too enthusiastic.
Estimates of values from $ 91,000 by 2020 to $ 110,000 by 2019 were a little ahead of their time.
Hence, it pays to take forecasting with caution, as any significant global event like a recession, political instability, or other health crisis can cause even seasoned investors to get a bad name.
Is Bitcoin the Trouble of Investing?
As with any investment, there are potential risks and rewards to consider when considering buying Bitcoin.
In 2021 prices keep going up and it’s an exciting market, with even day-to-day variation.
However, every investor should be aware of the significant volatility in all cryptocurrencies and understand that any purchase can result in losses if the Bitcoin value suddenly drops.
Most projections see Bitcoin well over $ 100,000 and potentially worth a lot more by 2025, but these are only estimates and not necessarily reliable projections for critical investment decisions.
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