Crypto fans are growing more by the day. All are hopeful that their investment will rise to an unimaginable value in the coming years. But can bitcoin really reach one million dollars a coin?
Cryptocurrency analysts and experts all have their opinions on whether bitcoin will reach the seven-figure value. And they all say the same thing, “Bitcoin is going to $1 a coin.” But the biggest question is when?
Since Bitcoin was created in 2009, it already increased from $0 to $56,079, which made it the fastest-appreciating product in history. The highest inflation and spike in value happened after 2017. Everyone who entered the bitcoin market prior to that date is now probably celebrating financial freedom. But the value is not ever-increasing as bitcoin halving occurs every four years, with the last halving was in 2020. The next halving is set to take place in 2024 and will most definitely trigger a massive spike in value a year after. This is the current trend that they observed in the previous years.
One expert thinks that Bitcoin could hit $500,000 by the end of the decade. They believe that the rise in the value of this cryptocurrency could even be bigger than the gold market.
Bitcoin Rallying
From the last halving that happened in May 2020, Bitcoin prices increased to 600 percent which is the biggest in history yet. A lot of investors saw the opportunity to protect their purchasing power by investing it in bitcoin.
According to OCryptoCanada, more people in Canada are now rallying into cryptocurrency. With its unexpected growth, more institutions, investors, and major companies have dive deep into bitcoin mining. One example is Elon Musk, owner of Tesla, who was reported to have purchased $1.5 billion worth of bitcoins.
People are rallying into bitcoin because of several factors. But one of the primary reasons is it being so scarce with only 21 million coins created and only 18.8 million coins in circulation. It makes the coin an exciting asset to hold for the coming years.
Unlike global central banks, there is no single authority controlling bitcoin. There are miners who carry out transactions and they use a specialized array of supercomputers. Bitcoin supporters claim that these supercomputers are possibly the strongest computer networks in existence.
Bitcoin’s Potential Market Cap
With more people joining the bitcoin market, the currency becomes more liquid. This directly affects the utility and stability of the price in favor of Bitcoin.
Experts believe that bitcoin will take the highest “seat at the kingdom for being that global reserve currency of the internet generation” because today, there is no native currency on the internet.
The famous global leader in financial services, JP Morgan, released a note to his clients and followers putting a price target of $146,000 for bitcoin. This is the market value that bitcoin needs to beat for it to start competing with the gold market.
For centuries, gold has been the safe haven for investors in safeguarding their financial assets. And bitcoin is slowly getting the same reputation. JP Morgan’s global market strategist even called the cryptocurrency a form of digital gold. The current value of gold held by the private sector is $2.7 trillion. Bitcoin needs to reach a market cap of $146,000 for it to be comparable to the value of gold. Today, bitcoin’s current market cap is over $1 trillion. But that’s already twice as compared to the beginning of 2021.
Digital wallets have started to embrace the future of cryptocurrency, like Paypal, Mastercard, and Visa showing their support over the past couple of months.
Downsides of Bitcoin
Similar to any cryptocurrency, bitcoin is known for its high volatility. It was said to be five times more volatile than the price of gold. But experts say that the volatility will stabilize once more institutions adopt and accept bitcoin as a form of currency.
Furthermore, people new to bitcoin mining should always remember the potential for wild market swings as they have observed in the past years. The value can go up or down by 50% anytime. This is one of the reasons why people are speculative. But experts say that if you truly want to invest in bitcoin, be ready to hold it for at least five years.
The bitcoin rally is generally driven by institutions but retail participation is also high since the pandemic started. They predict that the flow impulse will slow down as soon as economies reopen because people will get back to their physical jobs and will have less time to trade at home.
Regardless of the downsides and speculations against bitcoin, more people still continue to invest in the market. And if the predictions about bitcoin are right, the market cap could potentially reach a surge of 1,650% by 2025.
