$100,000 mark is quite a possibility in a few months. However, caution is advised.
The world’s biggest cryptocurrency is also the DeFi market’s biggest media magnet. In another episode of Bitcoin’s price roller-coaster, the cryptocurrency is soon expected to touch the $100,000 mark set by the experts since quite a few months from now.
- Experts predict 55 days period for the investors to jump into the price spike boat.
- Overall Bitcoin market hovers above $2 trillion.
- 81% hike in the prices of BTC since the highest yearly low in January 2021.
- The halving effect playing major role in yet another price phase.
If the crypto experts are to be believed, Bitcoin prices might hit the landmark figure of $100,000 by the end of this year. It is already hovering above the staggering $2 trillion market cap.
The past few weeks restarted the upsurge of the crypto market with Bitcoin rallying up the graph optimistically. Other coins accompanying the price spike includes Cardano, XRP, and Dogecoin.
After the tragic few months, Bitcoin prices finally reached the $50,000 mark first time since May, with experts predicting a long term rebound. Its prices plummeted to yearly low in January 2021 to $27,700 however, BTC has risen by 81% since then.
WHAT IS DRIVING THE WILD BITCOIN PRICE PREDICTIONS ?
While the massive buying from institutional buyers, status of national currency in El Salvador, and Biden administration’s Infrastructure Bill had significant role to play in the upsurge of prices, there is more to it.
There is a pattern in the mining of the cryptocurrency that has a lot to do with its price phases. Like any other financial market, cryptocurrency is too cyclic in nature. And it holds the most true for Bitcoin. The cycle of Bitcoin changes after the mining of every 210,000 blocks in the market. It has happened before and will happen in future again.
The cycle is based on a simple logic which is the halving effect. For example, between 2016 to 2020 i.e. 4 years, 12.60 bitcoins were mined per one block in every 10 minutes. The halving effect at the end of 2020, just 6.25 bitcoin are now mined per block in every 10 minutes.
This cycle continues and results into fall in production rate of Bitcoin.
During the end of every such cycle, miners’ rewards decrease by 50% and results in prices that turn out to be “all-time-high”.
So far, the market has already mined 40,000 blocks and according to experts, is just 8,000 blocks away from hitting the all time high. BTC will take roughly 55 days to reach the peak.
However, all these high price predictions of Bitcoin still do not eliminate the volatility. If investors want to benefit from the upcoming price spikes, it is important to consider your risk capacity.
Volatility is the major reason why investors are advised to maintain only 5% of their investment portfolio of cryptocurrency. Another important advise is to not let short term dips and volatility influence your long-term investment strategies.
One should also not let the cusp of mainstream investment overshadow the fact that no matter how much the prices spike, the future of cryptocurrency is still unclear in the coming decade. As much the institutional investors are indulging in Bitcoin buying, massive regulatory crackdowns still spell a different future for the world’s biggest cryptocurrency.