Bitcoin is the world’s first and most successful crypto asset. Since its inauguration, Bitcoin has made history, especially regarding its price. Everyone didn’t expect the asset’s value acquired during the bullish 2021.
In April last year, the value of the asset was $64,000 (£52,000). Even more, its market capitalisation value surpassed the one trillion-dollar mark. Other cryptocurrencies have also increased in value following Bitcoin’s value increment.
Typically, bull runs are usually followed by a bearish run. The value of Bitcoin has dropped. However, the current run doesn’t mean BTC holders and investors are losing cash. They can capitalise on this run to make future profits.
Factors That Will Affect Bitcoin’s Price in The Future
Demand and Supply
Supply and demand are key factors that affect the price of any asset. The cost of Bitcoin is not inflationary like that of Ethereum. This is because, unlike Ethereum, which has an unlimited supply, the demand for Bitcoin outweighs its supply.
Experts predict that the scheduled halving of Bitcoin in 2024 will make the asset scarcer. Therefore, the price of Bitcoin will likely go up. In addition, the demand for Bitcoin is growing as it becomes more accepted by firms, premises, and nations as a form of payment. As expected, this upsurge in demand will result in a shortage. This factor, therefore, means that investors should expect another bullish run around 2025.
Adaptation of Blockchain
PayPal announced that the app would allow users to make payments using cryptocurrencies directly. PayPal has over 400 million users worldwide, making it the most comprehensive online payment platform in the world. The first quarter of 2021 saw the firm report a net payment volume of over $220 billion (£180 billion).
The Cost and Rewards of Mining
Today the mining of Bitcoin is highly inefficient as sometimes it might not bring returns. Currently, a reward of 6.25 Bitcoin is awarded for a forever confirmed transaction. However, the halving scheduled for 2024 will have this reward to around 3.125 Bitcoin.
This halving of rewards, coupled together with the sky-rocketing prices of energy, will make Bitcoin mining even more inefficient. The effects this would have on the asset will be tremendous. However, other past Bitcoin halvings haven’t caused this effect. The increase in the cost of mining Bitcoin might push investors to resort to buying the asset instead of mining it.
Government Policies
Government policies and regulations are also among the factors that will influence Bitcoin’s future price. In 2021 Turkey banned the use of cryptocurrencies in the country. This policy affected the crypto market negatively. Suppose another big nation prohibited the use of Bitcoin, and the asset price is likely to fall.
On the hand, if more and more governments continue to adopt the use of Bitcoin, the price is more likely to rise. It is challenging to see countries such as the United States ban the use of cryptocurrencies. However, it is essential to remember that anything might happen, and the policies imposed by governments in the future will impact the price of Bitcoin.
Summary
Data from Wallet investors shows that the price of Bitcoin might rise above $100,000 (£82,000) from 2025. In addition, the data showed that the price might continue to soar above $200,000 (£164,000). It is evident with the facts at hand that the cost of Bitcoin will be higher soon.
However, it is essential to remember that they are several factors that will impact this price. Analysing the history of Bitcoin’s price, it is likely that you will get returns if you hold onto your asset to 2025.
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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
