Accurate long term predictions are an almost impossible feat. Just think about any prediction you made about anything in 2019! Having said that, it is human nature to try and investments are of particular interest for obvious reasons. Cryptocurrency predictions are no exception. Bitcoin (BTC) was the original cryptocurrency launched in 2009 and is still one of the highest rated according to Forbes magazine. So is it worth investing in?
The website digitalcoinprice.com predict an exponential growth of the Bitcoin over the next few years with an expected value of between $86K and $93K in 2030. Other sites and analysts suggest an even greater leap to over $400K or, in one case, even in excess of $1M.
Performance and Trends to Date
So how has it performed so far?
The first Bitcoin was launched in 2009 and in 2016, you could buy one for around $500. Since then it has been generally an upward trend. At the time of writing (July 2022) you can buy BTC on currency.com for around $20K, less than half its value 3 months ago but twice its value of 2 years ago. Prices peaked at $66K in October 2021. On a monthly basis prices fluctuate greatly and cryptocurrencies like other commodities move in waves. So, although currently in decline, sooner or later BTC will start increasing again. Looking at longer term trends, the algorithms suggest the value is likely to increase substantially over the next 8 years. But as we know from experience, both algorithms and analysts can get it very wrong!
Is it a Good Investment?
Other considerations to make before deciding whether to invest:
- BTC ranks as one of the top cryptocurrencies. In the fall 2021 the Bitcoin blockchain underwent an upgrade which has made it both more efficient and private. As of June 2022 it is accepted as a form of payment by almost 8K merchants in the US and promises further expansion.
- High volatility, in crypto in general, affects not only investments but the capacity to use BTC for everyday purchases. The investment in cryptocurrencies grew rapidly during the pandemic. However, the future of cryptocurrencies is not a given.
- Tighter regulation of cryptocurrencies is likely and although this may well result in greater stability of prices, BTC has a lot of competition. To date there are an estimated 20,000 cryptocurrency projects around the world with an approximate $870 billion current market value. In 8 years a lot could change.
Let’s not forget that the rules of supply and demand apply to cryptocurrencies too. The lower the supply, the higher the price. Some cryptocurrencies do not have a limit, for example Ethereum, while others have a maximum limit defined at onset. As you approach the limit, the theory suggests, the value will increase massively. BTC has a maximum supply of 21 million and there are currently just over 19 million in circulation. Bitcoin is created and enters the market when miners process blocks of transactions. It is estimated that 99% of the bitcoins will be mined by 2032. This process, however, was designed to slow over time, halving every 4 years. This means that it could take another 100 years to mine the last 1%!
Bitcoin’s price in 2030 depends on:
- Its usability in daily life.
- The amount of Bitcoin in circulation.
- Its ranking compared with competing currencies.
The price of Bitcoin in 2030 will also depend upon investor sentiment which, is often influenced by media coverage and government policy. If the last few years are anything to go by, it will continue to be a fast changing world. An exciting future lies ahead and 2030 is fast approaching. Purchasing a bitcoin, or part of a bitcoin, at current rates could quite possibly bring a five-fold return on investment!
Disclaimer: This article does not provide financial advice. It is only the author’s opinion and it may be wrong!