Long term price prediction bitcoin
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Over the years BTC has experienced many boom and bust cycles. The narrative surrounding the digital currency evolved as well, from uncensorable digital money and a peer-to-peer payment network to an inflation hedge and a store of value. Bitcoin's early critics have been coming round. After years of negative comments, Nouriel Roubini finally admitted that BTC could be a partial store of value. Even JP Morgan recently turned bullish, recognising Bitcoin's "potential long-term upside". In fact, most commentators and analysts expect BTC to go nowhere but up.
Let's briefly recap the most commonly cited bullish drivers, before looking at some Bitcoin price expectations and potential pitfalls. In some sense, Bitcoin's timing couldn't have been better. Created, in part, as a response to unlimited corporate bailouts during the global financial crisis, BTC is beautifully designed to counter continuous money printing by global central banks. In response to Covid, many governments introduced a plethora of fiscal measures to support their economies, leading to massive deficits. Central banks have been tasked with financing these deficits by printing exorbitant amounts of money.
Global monetary stimulus measures and near-zero interest rates are further contributing to the deterioration of the scarcity of fiat currencies. In comparison, assets such as silver , gold and yes, Bitcoin , are inherently scarce.
Bitcoin's supply, for example, is growing around 2. Its monetary policy can be described as quantitative tightening due to the halving of block rewards every four years. As mentioned above, BTC is a scarce asset. Only 21 million coins will ever be created.
As the original cryptocurrency, it also has a wide moat and enjoys powerful network effects. The network effect is crucial for adoption but also for the security of the blockchain. Despite many innovations in the crypto space, the Bitcoin blockchain remains the most secure, precisely because of the substantial network of devices worldwide verifying its accuracy.
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The scarcity of BTC and the security of its network are fundamental pillars of the Bitcoin bull case. We will cover this subject in-depth later in this article. However, to sum up, Bitcoin remains a small asset class as illustrated by the chart below. Liquidity is still insufficient for many institutional investors to meaningfully participate in the market. Over the coming years, as infrastructure and liquidity improve, institutional capital inflows are likely to be a significant bullish driver for the price of BTC.
Institutional money deserves a somewhat deeper analysis. The price impact of institutional capital flows on Bitcoin price over the next 5 years would be substantial, and there is sufficient evidence to support the institutional money thesis.
First, let's define institutional money. For our purposes, institutional money includes hedge funds, pension funds, family offices, high net worth individuals and corporate treasury departments alike.
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From the corporate treasury perspective, holding BTC might prove to be less risky than not having Bitcoin exposure at all. According to Messari, a crypto analytics firm, 0. Corporate treasurers have a tough job of managing a company's liquidity, capital structure and financial risks. Hoarding cash, however, is detrimental to shareholder value. What about hedge funds, pension funds and other professional investors? Are they likely to increase their exposure to BTC in the upcoming years?
To some degree, that's already happening. At this pace, the trust will own up to 5 per cent of Bitcoin's circulating supply by the end of Bill Miller, mutual fund legend and chief investment officer of Miller Value Partners, has recently summed up his bullish thesis for BTC, simply saying that "Bitcoin's supply is growing around 2. Another Wall Street legend, Stan Druckenmiller, expects that inflation could spike to between per cent and is using Bitcoin as a hedge in this scenario. From an investment management perspective, there's a strong case for holding BTC in a diversified portfolio.
Analysis by Messari shows that BTC offers the highest risk-adjusted returns, the lowest correlation to most markets including in economic downturns. If that's not enough, the chart below speaks for itself. Bitcoin's halving cycles tend to act as short- to medium-term price catalysts as reduced supply helps to push prices higher. The most recent halving happened in May of this year and, so far, BTC is following the price trends from the previous cycles. Historically, most gains occur in months following a halving.
As the BTC network grows and the asset classes mature, however, each halving cycle has less impact on the price.
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The stock-to-flow model could be used to analyse the potential impact of the most recent halving event on the price. PlanB, a Dutch institutional investor, published his stock-to-flow price model and multiple visualisations highlighting the effect of halvings on the price. We can also look at BTC's price action relative to another scarce asset, gold. This analysis suggests a 10x increase in the price of BTC over the coming years if it follows historical ranges.
However, Vollum's research also indicates that each halving cycle is less explosive than the previous one. Mainstream media ran BTC news story after story, causing retail investors to rush into buying the asset. But once hit, a major Bitcoin trend change occurred, and the price started going down.
But the stimulus efforts put forward by the US and other nations to combat the pandemic, inflated the money supply significantly putting Bitcoin in the financial spotlight. With no real resistance above the cryptocurrency is back in price discovery mode and sky is the limit. Several experts have weighed in on their short and long-term price expectations for Bitcoin price. Here are some of the most popular Bitcoin price forecasts from top crypto industry experts. The visionary was right once again, and the year prior the asset doubled that projection.
Bloomberg Research recently released a new report on the future of Bitcoin as an investment. Both predictions were accurate. However, how and when Bitcoin price will reach such lofty predictions is unclear. Crypto analysts often perform technical analysis in order to predict price movements and when they may occur. The cryptocurrency is breaking out into a new bull run and has gone parabolic.
According to the last cycle, Bitcoin is slightly ahead of schedule indicating some corrective patterns are ahead. But the short-term trajectory over the next year is up. Unfortunately, just like what happened after the bubble bursting, a bear market comes right after. And just like a new bull market started and the bubble pattern began again right after each hard-coded halving, another one is due towards the end of and into The revolutionary technology has sparked an entire industry aimed at disrupting traditional finance, and cryptocurrencies are already well on their way to widespread adoption and regular use by the mainstream public.
Bitcoin is accepted most places these days, and can even be purchased at grocery stores through Coinstar machines. Bitcoin has already come such a far way and even became a media sensation in thanks to stories of early investors in the crypto asset becoming rich. The below prediction chart outlines some of the minimum and maximum BTC price forecasts offered by technical analysts and industry experts in an easy to digest format. PrimeXBT also offers traditional assets such as the most popular forex currencies, commodities, stock indices, and spot contracts for gold and silver.
With Bitcoin about to take off on yet another bull run, the opportunity to profit has never been greater.
Bitcoin Price Development and Outlook
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