Digital currency has left both investors and enthusiasts awestruck. From the phenomenal rise of the oldest cryptocurrency to the present scenario where there are over thousands of cryptocurrencies, the digital currency is making and breaking records in raking in fortunes in the investment market.
As people are widening their perspective on digital currency and accepting them as one of the payment modes for various transaction deals, it is only fitting to say that cryptocurrency, especially bitcoin, is here to stay. But whether it will still see the progressive phenomenal trajectory in the coming years is a question that gains vital importance here!
If you have slept through the global rise of cryptocurrency and are regretting losing out on the chance of investing it before, then here are predictions for the coming year. So deduce whether or not to invest in it now!
- Currency.com gives the following picture for the analyst report over the fate of bitcoin in 2030. About 21.8% believe the price would crash below $5000. In contrast, a significant 18.6% believe its rise to be more than $50,000.
- The panelist at Financial Express pitches the bitcoin to settle at $4,287,591 by 2030. This is 14 times more value than what bitcoin holds today.
- The Ethereum CEO has more numbers to add to the figure. He predicts an all-time high of Bitcoin, touching $160,000.
- Libertex offers a similar analogy and expects bitcoin to average at $100,000.
How much credibility do these predictions have? Well, it is hard. The rise and drop in the price have been dramatically shifting their base even within the week. So, predicting nine years down the line may have some potential questioning involved, but yes, it is more or less like a gamble. But, owing to its history, bitcoin has made a safe space in the digital currency world. Unlike the newer currencies, there is no anonymity or dubiousness around the currency.
The factors that play a pivotal role
The ultimate fact: Bitcoins Are Not Stable! If you take a look at the recent trends, you’ll notice the fluctuations that the currency has hurdled through. At present, it stands at $62,084. A month back, it was at $51,469. A year ago, it stood at a humbler value of $14,157. Though there is no denying the upwards trend, the drops have no accounts. Here are some factors that cap the value:
The demand –
The price is proportional to the demands and the supply. Fortunately, the demand for cryptocurrency is seeing an upward trend. However, as more and more currencies are being mined, it is fast approaching the cap limit. But the price soaring is limited by the demand. If demand ceases, a fast drop is inevitable.
There are over 6000 cryptocurrencies that exist today in the virtual market. Ethereum and Binance are fast approaching bitcoin in the trading volumes. Hence, the phenomenal rise of bitcoin can be eclipsed by the currencies in the near future.
Currency exchange –
The availability of the exchange centers also has a role in the value of digital currency.
Mining is a competitive process. With traders worldwide decoding the cryptic codes to mine the currency, it takes more investment with each mining process.
Regulatory changes –
Cryptocurrency has so far escaped the bounds of regulatory bodies due to its complex nature. However, not having a supreme body has its flaws. A lot of uncertainties surround the trading of cryptocurrencies. Hence there is no way to know what can happen when.
Can You Learn from History?
From a humble beginning of $1 a coin to the massive rise to $62,000 for the same, the rise has been phenomenal. And there have been prophecies claiming the rise of bitcoin, though some were a little far-fetched.
Nobel laureate Paul Krugman’s prophecy regarding bitcoin failed to see the light of the day, but many preferred otherwise.
Richelle Ross predicted a solid $650 for bitcoin by 2016, which was resting at $425 the previous year. 2016 did see the rise, with June and July closing the deals with 672 and 624 respectively.
As reported by CNBC, Van-Petersen predicted bitcoin to amass $2000 by 2017, and yes, it crossed the feat in May itself.
Co-founder of TenX prophesized bitcoin hitting $60,000 by 2018, but not after a series of the dull period. Though the feat could only be achieved by 2021, the prophecy does have some merit considering it was made in 2016.
Though these successes have also seen a dramatic fall, the bottom line is, yes, the predictions do have some merit.
Though the picture looks bright, you must know about the possible risk that follows while investing. The rise in cryptocurrency is primarily credited to the covid era wherein a great demand surged the price. However, it is essential to note the slump, which proceeded for a few years till the imminent rise. Adding to it is the liquidity issue. With more and more investors opting for long-term deposits, the liquidity is decreasing drastically. The drop in the quarters has not escaped the notice of the analyst. However, all the predictions are pitched on the vision of a digitalized future.