Investors are wrestling with concerns over rising inflation, geopolitical tensions, and the possibility of tighter monetary policy by the U.S. Federal Reserve. The crypto market has increasingly tracked the stock market in recent months, which makes it even more intertwined with global economic factors.
With no end in sight, the war, inflation, and shifting monetary policy in the U.S. will likely continue to drive more volatility in the coming weeks and months, experts say. Bitcoin has only been above $45,000 for a few short stretches over the past six months, and hasn’t been above $50,000 since Dec. 25, 2021. Amid the ups and downs, Bitcoin’s current price is a long way off from the latest all-time high it hit in November, when it went over $68,000. But even with the recent decline in price, Bitcoin is still more than twice as valuable as it was just a couple years ago. For Bitcoin, these kinds of ups and downs are nothing new. Despite the volatility and recent slumping price, many experts still say Bitcoin is on its way to passing the $100,000 mark, though 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 Bitcoin prices will be over $110,000 in five years. The volatility is nothing new, and is a big reason experts say new crypto investors should be extremely cautious when allocating part of their portfolio to cryptocurrency. Bitcoin has shown as steady a rise in value over the years as any other cryptocurrency on the market. It’s only reasonable for Bitcoin investors to be curious about how high it can ultimately go. Unfortunately, Bitcoin’s price is extremely difficult to predict and even more susceptible to market factors than more established asset classes. But we decided to ask some experts for their best guesses anyway. Here’s what they said:
Bitcoin Price Predictions
It was easy to predict a $100,000 Bitcoin price late last year, coming off its latest all-time high in November. With Bitcoin’s big fall since then, the prediction game is even trickier. The most extreme crypto skeptics say Bitcoin will tank to as low as $10,000 in 2022, but a middle ground might be to say the cryptocurrency can still climb to $100,000 like many experts predicted late last year — just on a slower timeline.
“The most knowledgeable educators in the space are predicting $100,000 Bitcoin in Q1 2022 or sooner,” Kate Waltman, a New York-based certified public accountant who specializes in crypto, told us back in November 2021. But now, bullish experts are re-evaluating the crypto industry altogether as major corporations like Nike and other big brands are looking at ways to monetize their products in the digital metaverse. The rise of metaverse games, worlds, products, and experiences is increasing the popularity of altcoins, which has changed investors’ sentiments about Bitcoin (known as the original crypto). Many experts are hesitant to predict a number and a date, but rather point to the trend of Bitcoin increasing its value over time. Investors should expect a “pretty sustainable” rise in Bitcoin’s long-term value driven by organic market movement, with the $100,000 threshold in near-sight, predicted Jurrien Timmer, director of global macro at Fidelity Investments, last October. “What I expect from Bitcoin is volatility [in the] short-term and growth [in the] long-term,” says Kiana Danial, founder of Invest Diva and author of “Cryptocurrency Investing For Dummies.”
Here are some more predictions we found, ranked from low to high over the next year: Big financial institutions have made their own predictions, as well, with JPMorgan predicting a long-term high of $146,000 and Bloomberg predicting it could hit $400,000 if the currency climbs at rates comparable to the past. Even if Bitcoin breaks $100,000, stay focused building on your overall portfolio including passive index funds, emergency savings, and your retirement account(s). Normal economic factors influence the price of cryptocurrency just like any other currency or investment — supply and demand, public sentiment, the news cycle, market events, scarcity, and more. As a new and emerging asset, additional factors influence Bitcoin’s value more than the average currency or security. Here are some: There are only 18 to 19 million Bitcoins currently in circulation, and minting will stop at 21 million. Industry experts consistently point to this built-in scarcity as a big part of cryptocurrency’s appeal.
“There’s a fixed supply but increasing demand,” says Alexis Johnson, president of the blockchain public relations and events company, Light Node Media. Other experts point out Bitcoin has value because people give it value. “That’s really why everybody’s buying — because of the psychological aspect,” says Nelson Merchan, Johnson’s Light Node Media co-founder. That can make it difficult for the average consumer to discern whether Bitcoin and other cryptocurrencies are legitimate. The whole concept of supply and demand only works when people want something scarce — even if it previously didn’t exist. “It actually does almost kind of seem like a scam,” Merchan says about Bitcoin’s origins. Though he says he’s seen his crypto holdings reach millions at times since he began investing in 2017, he’s also seen them disappear in an instant. “I’m a big believer that if it’s not in cash, you don’t really have that money because in crypto, anything can drop dramatically overnight,” Merchan says. This is why certified financial planners suggest only allocating 1% to 5% of your portfolio to crypto — to protect your money from the volatility. One of the main factors driving the price increase of Bitcoin is the rate at which new consumers are buying and exploring cryptocurrency, says Waltman.