Bitcoin Price Can Reach ATH Again For This Reason!

You may be increasingly doubtful about the unclear price of bitcoin in recent months. Even the last few weeks the price of bitcoin has fallen even deeper. However, some experts argue that the bitcoin price could return to ATH for several reasons.

It's been a rocky start to the year for Bitcoin price, but experts still say it will hit ATH again and it's more a matter of when.

Price Bitcoins held steady below $21.000 on Friday as investors continued to bail out riskier assets amid macroeconomic uncertainty.

Several factors contributed to growing economic anxiety including soaring inflation, a shaky stock market, rising interest rates and fears of a recession. The crypto market has increasingly followed the stock market in recent months, which has made it increasingly linked to global economic factors.

With no end in sight, wars, inflation and changes in monetary policy in the US will likely continue to drive more volatility in the coming weeks and months, experts say.

Bitcoin Price Movement During 2022

 

Bitcoin price has only been above $45,000 for some brief time over the past six months, and has not been above $50,000 since December 25, 2021.

Amidst the ups and downs, the current price of Bitcoin is still far from its recent price. The high was reached in November, when it surpassed $68,000.

But even with the recent price drop, Bitcoin is still more than twice as valuable as it was a few years ago. For Bitcoin, these kinds of ups and downs are nothing new.

Despite the recent volatility and price slump, many experts still say Bitcoin is on its way to crossing the $ 100,000 mark, although with varying opinions on exactly when that will happen.

And a recent study by Deutsche Bank found that about a quarter of Bitcoin investors believe that the price of Bitcoin will be more than $110,000 in five years.

Reasons Bitcoin Price Can ATH Return

Normal economic factors affect cryptocurrency prices just like any other currency or investment, supply and demand, public sentiment, news cycles, market events, scarcity, and more.

As new and new assets emerge, additional factors influence the value and price of Bitcoin more than the average currency or security. Here are a few:

Scarcity

There are only 18 to 19 million Bitcoins currently in circulation, and printing will stop at 21 million. Industry experts consistently point to this inherent scarcity as a large part of cryptocurrency's appeal.

Adoption

One of the main factors driving the increase in the price of Bitcoin is the rate at which new consumers are buying and exploring the cryptocurrency. 

Adoption Bitcoins has increased at an annual rate of 113 percent, according to data from digital asset management firm CoinShares. Meanwhile, people are adopting the internet at a slower rate of 63 percent.

If people use Bitcoin at a rate comparable to the early days of the internet (or faster), the report states that there will be 1 billion users by 2024 and 4 billion users by 2030.

CoinDesk reported last month the number of new wallets worldwide increased by 45 percent from January 2020 to January 2021, to around 66 million. Exchange crypto Popular Coinbase says it now has more than 73 million users worldwide, while its fellow exchange 

Regulation

Federal officials have made it clear in recent months that they have their eyes on crypto. Industry professionals recently alluded to what crypto insiders perceive as “hawkish” federal regulations to be one of the main drivers for lagging Bitcoin prices. 

Crypto regulation raises many unanswered questions. President Joe Biden recently signed an infrastructure bill requiring all crypto exchanges to notify the IRS of their transactions.

Similarly, Treasury Secretary Janet Yellen recently said stablecoins, a type of crypto tied to the value of the US dollar, should be subject to federal scrutiny.

Also read: What is Crypto Asset? Check out the Full Review!

Mining Cycle

Finally, another major influence on the price of Bitcoin is the cycle known as halving. It's complex and algorithmic, but essentially halving is a step in the Bitcoin mining process that results in a reward for halving Bitcoin mining transactions.

Halvings affect the rate of entry of new coins into circulation, which can affect the value of existing Bitcoin holdings. Historically, halving correlated with boom and bust cycles. Some experts try to predict this cycle to the day after the halving event ends.

As with any investment, financial planners and other experts advise not to let fluctuations in the price of Bitcoin lead to emotional decision making.

Studies have shown investors who contribute regularly to passive index funds and ETFs perform better over time, thanks to a strategy called dollar cost averaging.

That's why experts recommend investing no more than 5 percent of your entire portfolio Vicigers in cryptocurrencies, and never invest at the expense of saving for emergencies and paying off high-interest debt.

Also read: Bitcoin Drop? Fear Not, Here Are 5 Ways To Deal With It!

The path to long-term wealth and saving for retirement is most often successful for people with diversified investments such as low-cost index funds, of which crypto makes up a very small part.