Realistic Bitcoin Predictions for the Future
Since Bitcoin appears on a social media post every three seconds, realistic Bitcoin predictions frequently get hidden under large amounts of content. Keep reading for realistic Bitcoin predictions that utilize past trends, news updates, and outside factor determinations for accurate forecasts.
Current Trends Complicate Realistic Bitcoin Predictions
Bitcoin value from 2020 into 2021 followed bull market standards. At the beginning of COVID-19 shutdowns in Spring 2020, Bitcoin hovered around $7,200. By November 2020, Bitcoin doubled to $18,300. And in the first months of 2021, Bitcoin peaked at $64,000.
The American stock exchange only yields an average annual return between 10 and 11%. In 2021, Bitcoin has already seen a 100% yield rate. This yield rate would typically distinguish Bitcoin as a leading investment opportunity.
However, twice in 2021, Bitcoin value dropped by over $10,000 in less than a week. As 2021 saw many unprecedented events, the value of Bitcoin continues to vary based on changing factors making realistic Bitcoin predictions hard to determine.
Outside Factors
Besides the natural volatility of cryptocurrency, news and world events impact Bitcoin values and realistic Bitcoin predictions.
Impact of Cryptocurrency Influencers
Since Bitcoin’s onset in 2009, early investors have retained a disproportionate influence on the cryptocurrency’s value and trends. Elon Musk, for example, continues to impact Bitcoin prices with his social media activity on Twitter.
Volatility tied to Musk’s tweets reflects the nature of Bitcoin itself. As an unbacked currency, Bitcoin’s value depends on those buying and selling it. Cryptocurrency is untied to corporations and their balance sheets or Form 10-ks, which aid in realistic Bitcoin forecasts.
Instead, a subset of the Bitcoin community follows key figures and news to determine their buying and selling decisions. If many Bitcoin investors begin to sell out of panic from Musk’s tweets, the cryptocurrency sees widespread decreases.
In response, the worldwide hacking group, Anonymous, released a video targeting trolling intentions like Musk. Anonymous is stepping in to bring consequences to Musk’s actions in the unregulated cryptocurrency world. Bitcoin’s fluctuation from catalysts as mundane as tweets reflects the unregulated nature of cryptocurrency. However, regulations are within the realistic Bitcoin predictions for 2022.
Potential Bitcoin Mining Council
In May 2021, discussions of a Bitcoin Mining Council emerged between Michael Saylor, MicroStrategy co-founder, and Elon Musk.
The proposed Bitcoin Mining Council would direct cryptocurrency miners towards sustainable standards. Already, Bitcoin miners designed by entrepreneurs use energy surpluses or renewable energy sources. The Bitcoin Mining Council intends to bring these green mining machines to large cryptocurrency companies. Also, the initiative includes common energy reporting standards to target disproportionate energy users.
Though, a Bitcoin mining council would slow the mining process at large. Some believe this is the intention of the initiative. Out of the total operating level of 21 million Bitcoin, only 2-2.3 million remain unmined. As most Bitcoin mining occurs outside of North America, the Bitcoin Mining Council’s intended jurisdiction of the United States would yield small changes.
Instead of intended environmental impacts, the Bitcoin Mining Council would more directly slow the mining processes of North American companies than world leaders in China.
Momentum of Other Cryptocurrencies
As Bitcoin nears its 21 million limit, other cryptocurrencies have started to appear more lucrative for miners. By January 2021, Investopedia recognized over 4,000 cryptocurrencies.
Ethereum and Litecoin are current alternatives to Bitcoin. These cryptocurrencies offer different applications as well. Ethereum boasts a cryptocurrency network which makes it a fully functional alternative financial system. Unlike Ethereum, Bitcoin functions more similarly to a stock than a separate currency. Litecoin, on the other hand, emphasizes trading capacities with faster transaction rates and a larger total mine.
Despite these alternatives, Bitcoin remains the cryptocurrency industry leader because of market capitalization, user base, and popularity.
Realistic Bitcoin Predictions
Mainstream acceptance
The first three realistic Bitcoin predictions occurred by early 2021 trends of reputable companies investing in Bitcoin. Companies currently invested in Bitcoin include Microsoft and Visa.
As reputable companies take these steps, Bitcoin’s volatility will decrease. Previous Bitcoin investors typically used cryptocurrency as a discretionary investment. These investors would fall into the innovator and early adopter categories of consumers. Though exploratory, the entrance of Fortune 500 companies into cryptocurrency indicates a belief and trust in the industry that will push later stages of consumers into the market as well.
As cryptocurrency celebrates its 20th birthday in the next decade Bitcoin is set to populate mainstream investment portfolios.
Increased regulations
At the beginning of the Biden administration, discussions on federal cryptocurrency regulations began.
Most of the Biden administration’s cryptocurrency proposals are concerned with tax collection. Like the taxation process of stocks, the value determination of cryptocurrency constantly fluctuates, so taxes are typically collected on cashed-out stocks only. Early Bitcoin users lauded the cryptocurrency for its anonymity and fluidity. For tax collection purposes, these factors remain problematic.
With cybersecurity concerns rising in June, the Biden administration announced a new anti-corruption directive for national security. This directive includes a focus on cryptocurrency corruption, among other cyber frauds.
The Biden administration continues to develop more advanced regulations on cryptocurrency. However, FDIC-type protections remain a distant possibility.
Continued growth
Some fear the Bitcoin bull market will never return. More likely, Bitcoin will continue to yield positive return rates over a slower period. Precise Bitcoin trajectories differ from expert to expert. Estimates vary from $400,000 to a loss from the current $31,500 by the end of 2021.
Now that bitcoin is an established investing means, longer prediction periods yield improved accuracy. Realistic bitcoin predictions forecast growth to $500,000 by 2030. Using today’s Bitcoin value of $31,500, growth to $500,000 by 2030 would require return rates of 100% each year.
These forecasts go hand-in-hand with more mainstream Bitcoin investment and increased regulations.
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