Bitcoin’s Path to $1 Million: Wishful Thinking or Viable Scenario?
There’s a lot of uncertainty and instability in the crypto space owing to the novelty, disruptive nature and volatility of this work-in-progress asset class. But if the future is vague, the past is crystal clear and one of the things we can learn from looking back at crypto’s limited history is that Bitcoin has performed remarkably over the years, experiencing an impressive growth since its inception back in 2009. From an inconspicuous project, Bitcoin developed into a full-fledged crypto powerhouse that has given rise to a thriving industry and has popularized the idea of decentralized finance in different spaces and sectors all across the world.
However, past performance is not always indicative of future results. So, while Bitcoin’s achievements so far have been without a doubt impressive, the flagship cryptocurrency cannot rest on its laurels. Traders, investors and average individuals buy Bitcoin p2p in the hopes that the asset will continue to appreciate in the future and reach mainstream adoption at one point.
It’s pretty obvious that people have high expectations from Bitcoin. Some expectations go as far as placing Bitcoin near the $1 million mark, but can the king of crypto deliver? That’s the question that many experts and crypto enthusiasts have been asking themselves lately. It’s difficult to say if some investors are being overly optimistic when it comes to assessing Bitcoin’s potential or if their hopes and predictions are rooted in reality. But we can analyze the situation based on the factors that are most likely to influence Bitcoin’s evolution and the different perspectives that experts have on the matter.
The factors that could drive Bitcoin to the $1 million threshold
According to Finbold, there are various factors that could contribute to Bitcoin’s rise in the future and potentially push the asset to the $1 million mark, as follows.
Halving events
Bitcoin is by design programmed to slash its mining reward in half every four years or so until it reaches its maximum supply of 21 million BTC. These events, commonly known as halvings, are meant to counteract inflation by maintaining scarcity and thus drive Bitcoin prices up as the supply diminishes.
Historically, halving events have been linked with specific trends in the Bitcoin price. More precisely, analysts have noted that in past cycles Bitcoin’s price started to appreciate steadily one year before the halving took place and then continued to increase after the event until reaching new all-time highs. Bitcoin’s fourth halving is set to take place in May 2024, so the price appreciation that Bitcoin has experienced since the beginning of the year matches this pattern perfectly. This means that 2024 could bring a new bull run for Bitcoin and co. and that could bring the asset closer to $1 million.
Viability as a form of payment
The original crypto was created with the intention to serve as an alternative to fiat money and allow people to pay for their goods and services with it. However, Bitcoin has yet to reach this objective as most people these days use it as a form of investment rather than a payment method. At the moment there are only two countries in the world that accept Bitcoin as a legal tender: El Salvador and the Central African Republic. The rest of the world is still reluctant to embrace crypto for payment purposes due to its price volatility.
The good news is that the number of businesses and organizations accepting Bitcoin payments has increased in recent years, with big companies like Microsoft, Shopify, Burger King, Ralph Lauren, Starbucks and more joining the trend. There are also more crypto ATMs as well as Bitcoin-to-cash and cash-to-Bitcoin service providers available all across the world, improving accessibility and driving widespread adoption of Bitcoin. The expansion of its user base is necessary for Bitcoin to continue its appreciation journey.
Regulatory clarity
Another reason why companies are reluctant to implement crypto payments or use Bitcoin in any way is the lack of regulatory clarity regarding digital assets. So far, the different policies that governments around the world have set in place to regulate this asset class have only spread confusion and created a fragmented regulatory landscape that is difficult to understand and navigate for both crypto users and providers.
On the bright side, governments increased interest in regulating crypto suggests that digital assets are inching closer to mainstream acceptance. The prospect of a fully regulated and therefore safer crypto market can prove beneficial to Bitcoin in the long run.
The state of the economy
The flaws in the global financial system are more obvious than ever before with concerns over an impending economic crisis growing stronger. This could prompt people to look for alternative solutions to avoid risks and manage their finances. In this context, the demand for Bitcoin could increase and as a consequence, its value would rise.
What do experts have to say about it?
There are a number of experts who seem to be convinced that Bitcoin could reach $1 million in the years to come. Cathie Wood, an American investor and the founder, CEO and CIO of ARK Invest, is one of them. Her firm has predicted that Bitcoin will surpass $1.4 million by 2030, citing a large holder base with a long-term focus and a strong network foundation as the main factors behind the potential rise.
Similarly, Arthur Hayes, Former BitMEX CEO, thinks that Bitcoin has what it takes to hit the $1 million mark by 2030. However, he bases his predictions mainly on the influence of geopolitical events like China’s decision to reduce the Reverse Repo Rate (RRR) by 0.25 and sanctions against Russia following the invasion of Ukraine.
Jesse Powell, the CEO of Kraken, also supports the optimistic scenario for Bitcoin appreciation, stating that the continuous depreciation of fiat money and the need for a more resilient asset class could lift Bitcoin to new heights. As with all things crypto, these predictions need to be taken with a grain of salt. While it’s not impossible for Bitcoin to reach $1 million, there are many factors at play and no one can tell for sure how things will develop in the future.