What is Bitcoin and what makes it valuable?
- Bitcoin is the first cryptocurrency and was built on Blockchain technology. Use the proof-of-work concept to reward its members
- Bitcoin uses a peer-to-peer network and has no central authority.
- The Bitcoin ledger is public and anyone can store it on their computer.
- Anyone can create a Bitcoin token and can be transferred to any of the wallets, however, bitcoin address owners cannot be identified, but any Bitcoin transaction made is accessible by anyone, anywhere.
- There is no single ledger, and anyone can store Bitcoin. The storage process is called Mining, and those who store are called miners.
- No approval is required for the completion of a Bitcoin transaction. It is done by the network itself without the interference of any third-party system.
- It is a limited resource of 21 million coins of which 19.1 million are being supplied.
Why is Bitcoin valuable?
There are many who think that Bitcoin is actually of zero value. However, given its limited offer and increasing usage for payment, it has value.
- In Layman’s language, Bitcoin is like gold hidden within a computer network instead of a mine in Africa. The creators deliberately created a limited number of them and created a whole series of tasks that are difficult to achieve. Just like in real gold mining, Bitcoin mining becomes difficult if several people mine at the same time or as the number of Bitcoins continues to shrink. It cannot be used as ornaments, one of the great factors that drive the value of gold.
- To solve this problem, the creators designed it in the form of a currency authenticated via a blockchain. In recent years, Bitcoin has been increasingly used as an alternative to the US dollar or other national currencies. It is now accepted for a fee by many companies around the world.
- There are differences even with the national currency. The value of a national currency like the dollar has risen or fall in a number of factors: the number of dollars printed by the Federal Reserve, how the Fed handles interest rates, the performance of the economy, and so on. However, among them, the role of a central bank (such as the Federal Reserve) is a crucial difference from Bitcoin. The Federal Reserve ensures that the dollar does not experience wild fluctuations in short periods of time so that households and businesses can better manage their lives. While Bitcoin enjoys the absence of central control and therefore any form of voluntary devaluation, it suffers from increased volatility.
Bitcoin Price Prediction: What Factors Affect Bitcoin Price?
|Factors that have a positive influence on the price of Bitcoin||Factors that have a negative influence on the price of Bitcoin|
Adotion of Bitcoin
Inclusion in mainstream ETFs
Supply of Bitcoin from miners (lower)
Cost of producing a Bitcoin
|Inflation and higher interest rates
Market problems like LUNA etc.
Baby supply from miners (highest)
Coin domain (lower)
Quick summary of Bitcoin’s current position in the market
- Market Cap: $404 billion [Scedaggio]
- Ranked among all cryptocurrencies: 1st
- Bitcoin competitors: Ethereum, Gold (?), National Currencies (?)
- Current performance: underperformer [versus gold and national currencies]
- % of holders who are currently profitable: 50% [Steady]
Is Bitcoin a good investment?
- Bitcoin has produced positive returns in 9 years out of 11
- 2018 was the most difficult year that also coincides with the year in which the Federal Reserve reduced the size of its balance sheet. During that year, Bitcoin closed 74% less than the previous year. It took Bitcoin 3 years to recover.
- Unlike Alts or even Ethereum, Bitcoin has been there for quite a long time and with a record of proven performance.
While the current price collapse would be a dampening in the short run, long-term demand will continue to push prices higher. Especially since the supply of bitcoin mined bitcoins will decrease by half in 2025, in just 2 and a half years. As supply decreases, current volatility is likely to decrease.
|Closing price 2021||$46,306|
|Closing price 2020||$28,994|
|Closing price 2019||$7,216|
|Closing price 2018||$3,740|
|Closing price 2017||$144,156|
|Closing price 2016||$964|
|Closing price 2015||$431|
|Closing price 2014||$320|
|Closing price 2013||$754|
|Closing price 2012||$13.5|
|Closing price 2011||$4.3|
|Closing price 2010||$0.3|
BTC Price Prediction: Bitcoin Price Performance in 2022
- Bitcoin plummeted from its peak in November after October’s US inflation numbers breached the 6% level
- In January, Bitcoin fell by a further 18% even as inflation rose. Brent crude oil, for example, rose 14%
- February was unusual because Bitcoin gained from the Russian invasion of Ukraine. Initially it was seen as a safe haven. Bitcoin rose 20% in February
- The momentum continued in March when Bitcoin rose marginally to $45,539. So, by December 31, 2021, when Bitcoin closed at $46,306, it had only dropped by $1,000. The lowest point was about $34,000
- With the US inflation numbers rising and the Fed raising rates twice, Bitcoin fell by a whopping 55% between April and June 18.
- As oil prices cooled, Bitcoin rose 17% from the June 18 bottom to $17,708. However, BTC has stalled over the past 5 days with limited progress as crude oil prices have moved higher again.
So multiple factors have played a role in how Bitcoin prices have moved this year: feelings that BTC will be a safe haven in the event of war and a war-prone Russia will evade sanctions and use Bitcoin. It was then negatively affected by inflation, crude oil prices and finally interest rate hikes.
All of these factors need to improve for Bitcoin to move decisively to the previous high.
|Last 5 days||-1.5%|
|Last 5 days||+2.9%|
|Last 5 days||+3.4%|
Bitcoin Price Prediction 2022
|Average Bitcoin Price Prediction 2022||$28,477|
|Price of Digitalcoin||$29,951|
Bitcoin Price Prediction 2023
|Average Bitcoin Price Prediction 2023||Price: $32,952|
|Price of Digitalcoin||$37,791|
Bitcoin Price Prediction 2025
|Average Bitcoin Price Prediction 2025||$40,754|
|Price of Digitalcoin||Price: $51,376|
Bitcoin Price Prediction 2030
|Average Bitcoin Price Prediction 2030||Price: $458,888|
|Price of Digitalcoin||$103,365|
Bitcoin Price Prediction: Will Bitcoin Recover Soon?
There are 5 reasons to say that Bitcoin will recover sooner or later
- BTC has value both in terms of store of value and currency for payment. It’s certainly not where the gold is or where the dollar is at the moment, but it’s headed that way.
- Bitcoin prices are tied to disposal income and liquidity as the willingness to try a relatively new reserve of value or currency increases when there is enough liquidity. The recent drop in the price of Bitcoin is linked to the decline in liquidity. Historically, liquidity improves at some point in time and therefore it can be said that Bitcoin will recover as liquidity returns to the market
- The weaker holders of Bitcoin have come out in the last 7 months and some more will come out in the coming weeks. With only the strong and those who have invested at these levels remaining, BTC will gradually recover
- Bitcoin has had a few poor years in the past and has recovered from those as well, so this is not the first collapse in Bitcoin’s history.
- Some compare Bitcoin to Tulip Mania and others to Dot Com Bust. But the fact is that the Tulip Mania and Dot Com boom lasted about 3 years each. Bitcoin has been tested repeatedly over the past 12-15 years in this modern era of computers and boom and bust cycles. So yes, the comparison is incorrect and Bitcoin will recover again.
Bitcoin Prediction: Will Bitcoin Go Down Again?
There are a number of reasons why people think Bitcoin hit rock bottom last week.
- Santiment data: The supply or supply of BTC remains low, suggesting that many think Bitcoin prices will rise from above
- Technicians (MACD and RSI analysis) suggest that bitcoin minimum is here
- BTC’s Whale Holdings has increased in the last 2 weeks
- On the Macro side, crude oil prices have fallen by $in recent weeks
However, there are numerous reasons to argue why Bitcoin prices have not yet reached the bottom
- Some analysts argue that, given that almost half of Bitcoin holders are still in the money, the low of the year has not yet been reached. Bitcoin’s hash rate has declined over the past 3 days suggesting that miners are not confident about Bitcoin prices
- Economic fundamentals (minus inflation) have not yet changed
- There may be more companies and cryptocurrencies that could fail in the coming weeks and months (such as Luna, Celsius, 3AG), and the Federal Reserve’s rate hikes have only begun and are nowhere near where the Fed wants it to be.
So while there are reasons to believe that $17,000 was the bottom, there are also some loose ends. It is best to wait until the July 13 consumer inflation report confirms the fund. Such data should show that inflation declined in June 2022.
Bitcoin Prediction: Is It a Good Time to Buy Bitcoin?
Yes, it is a good time to buy Bitcoin for long-term investors (2 to 5 year horizon) as prices have fallen significantly. However, some caveats
- While there is some evidence that Bitcoin has reached the bottom for the year, it is not definitive.
- Factors in favor include the supply of Bitcoin to exchanges has decreased, whale purchases have increased, crude oil prices have fallen over the past 2 weeks, and some technicians suggest a Bitcoin fund (see video below).
- But macros still don’t favor Bitcoin. We have no visibility into inflation or how much more the Fed will squeeze liquidity.
Therefore, the risk of Bitcoin falling further remains. However, the risks are lower than last week. An investor willing to manage the risk of a lower move could invest now. The most prudent move would be to wait another couple of weeks.
BTC Bitcoin Price Prediction: Current Outlook
|General perspectives||Marginally negative|
|1. The wisdom of the market||Marginally negative|
|1b. Market data||constant|
|1b. Technical recommendation||Sell|
|2. The wisdom of the crowd||Marginally negative|
|2nd. The buzz of the crowd||neuter|
|Google search volumes||inferior|
|Buzz on social media||superior|
|2b. Feeling on social media||inferior|
Bitcoin Price Prediction Today: Market Cap and Volume Data
|Zip code. Current Market||$396 billion||constant|
|Traded Volume in Terms of $Value||$26.7 billion||constant|
|Bitcoin Price Prediction: Detailed Analysis of How Bitcoin Gets Its Value, Why It’s Volatile, Why It’s Going Down Now, How Low Will It Become, When It Will Start To Recover, What Is Its Performance Track Record, and Most Importantly, Is the Crash Over?
Bitcoin’s price forecast for 2022 is $28,477
Bitcoin’s price forecast for 2025 is $40,754
Bitcoin’s price forecast for 2030 is $458,888