Skip to content
Home » Here’s What Investors Should Know About Crypto

Here’s What Investors Should Know About Crypto

It has been a difficult start to Bitcoin’s year, but experts still believe that Bitcoin will surpass $100,000.
Bitcoin dropped to close to $38,000 Friday due to investors’ concerns about rising inflation, geopolitical tensions and tighter monetary policies by the U.S. Federal Reserve. The cryptocurrency market has become more closely linked to the stock exchange in recent months. This makes it more dependent on global economic factors like those stemming form Russia’s conflict in Ukraine.

Minutes from March’s Fed meeting show that the Fed plans to shrink its balance by $95 billion per month in order to combat inflation. Inflation data from March showed 8.5% increase in consumer prices over the previous year.

Experts say that there is no end to the U.S. war, inflation, or shifting monetary policy. This will drive volatility for the next weeks and months.

Armando Aguilar (head of alternative strategies, research, and Ledn), a digital asset saving and credit platform, said that the overall market noticed the strong correlation to Bitcoin. The S&P 500 and NASDAQ had the highest correlations to Bitcoin, with 0.88% & 0.91% respectively. One correlation means they move the same way.

Bitcoin has not been over $45,000 in the last four months and hasn’t been above $50,000. Bitcoin’s 6-month low of below $34,000 in January has not been broken. The current Bitcoin price is far from its November record high of over $68,000. Despite the recent drop in Bitcoin’s price, it is still worth more than it was a few years ago. These kinds of ups or downs are not unusual for Bitcoin.

Despite volatility and recent declines in price, experts believe Bitcoin is on the way to reaching $100,000. But, opinions vary on when that will happen. Deutsche Bank recently conducted a study that found 25% of Bitcoin investors believe Bitcoin will surpass $110,000 in five year’s time.

This volatility is nothing new. Experts recommend that crypto investors be very cautious when allocating any part of their portfolios to cryptocurrency. Bitcoin has seen a steady increase in value over the years like any other cryptocurrency. Bitcoin investors are entitled to be curious about its potential future heights.

Bitcoin’s value is very difficult to predict and is more subject to market factors that other established asset classes. However, we decided to get the opinions of experts. Here’s what they had to say:
Predictions of Bitcoin’s price

It was simple to predict a Bitcoin price of $100,000 late last year. This was after the cryptocurrency reached its all-time high of $11,000 in November. It is now even more difficult to predict Bitcoin’s future with its dramatic fall.

For Cryptocurrency prices & charts head on over to My Power Token.

Crypto skeptics who believe Bitcoin will crash to $10,000 in 2022 are the most extreme. But, there is a middle ground. Experts have predicted that Bitcoin could still reach $100,000.

“The most qualified educators in this space are projecting $100,000 Bitcoin in Q1-2022 or earlier,” Kate Waltman, a New York-based certified professional accountant who specializes crypto, said to us back in November 2021.

Now, bullish analysts are reviewing the crypto market as major corporations like Nike are exploring ways to monetize digital products. The popularity of metaverse products, games, and experiences has increased the appeal of altcoins. This has had a significant impact on investors’ perceptions of Bitcoin (known as the original cryptocurrency).

Many experts hesitate to predict a date and a number. Instead, they point to Bitcoin’s growing value over time. Investors should expect a “pretty sustained” rise in Bitcoin’s long-term price driven by organic markets movement. This is according to Jurrien Taylor, global macro director at Fidelity Investments.

Kiana Danial is the founder of Invest Diva, and the author of “Cryptocurrency Investing For Dummies.”

We found some other predictions, ranked low to high for the next year.
Ian Balina

View from: Bitcoin investor and founder, Token Metrics media and crypto research company
Prediction: Bitcoin may reach $100,000-$150,000. However, the timeline is uncertain
Why? Bitcoin is experiencing a bearish sentiment, but the entire crypto market and other cryptocurrency asset classes are not. While Bitcoin was the original cryptocurrency, other crypto assets have overtaken it in innovation when it came to “Web 3,” or the new internet built upon blockchain. Bitcoin will recover eventually because of the hype surrounding the metaverse, new altcoins, and increased demand.

Matthew Hyland

Point of View: Technical analysis, blockchain data analyst
Prediction: Bitcoin will reach $100,000 by 2022
Why: Although the price of Bitcoin is nearly equal to that in January 20,21, there is an increase in demand for altcoins. Hyland tweeted that there’s a continuing trend of Bitcoin supply leaving major crypto exchanges. He said this in a tweet. A recent tweet by Hyland stated that a fall below $40,000 could result in a Bitcoin bear, and he also suggested this.

Robert Breedlove

Parallax Digital CEO and founder.
Prediction: $307,000 by Oct 2021 (now passed), $12.5 million 2031
Why: After COVID-19, inflationary pressures will drive interest and push the Bitcoin value higher than previously projected, Breedlove explained in an interview this year. Breedlove, who is more of a philosopher among crypto enthusiasts, often talks about the wider social implications and crypto as a form decentralized currency that is more transparent. But his price predictions have not been exactly accurate.

JPMorgan predicted a long-term peak of $146,000, while Bloomberg predicted it could reach $400,000 if currency rates rise at comparable rates to the past.
Pro Tip

Even if Bitcoin breaks $100 million, keep your eyes on your overall portfolio which includes passive index funds, emergency savings and retirement accounts.
What influences the price of Bitcoin?

As with any currency or investment, normal economic factors can influence the price. These include supply and demand, public sentiment and market events.

Bitcoin’s value is affected by more factors than the average security or currency because it is an emerging asset. Here are some examples:

There are only 18-19 million Bitcoins in circulation at the moment, and production will cease at 21,000,000. Experts in the industry point out that cryptocurrency’s inherent scarcity is a key part of its appeal.

Alexis Johnson is president of Light Node Media’s blockchain public relations agency and events company.

Others agree that Bitcoin’s value is due to the fact that people give it value. Nelson Merchan (co-founder of Johnson’s Light Node Media), says, “That’s why everybody’s buying — because it has a psychological aspect.” It can be difficult for consumers to know if Bitcoin or other cryptocurrencies are legal. Supply and demand are only effective when people desire something scarce, even if it didn’t previously exist.

Merchan comments on Bitcoin’s origins, “It does actually almost kind of look like a scam.” He claims that his crypto holdings reached many millions in the years since he first invested in 2017, but they also vanished in an instant.

Merchan said, “I am a firm believer that if your money is not in cash, it doesn’t really exist.” Cryptocurrency can cause a dramatic drop in value in an instant. To protect your investment from volatility, certified financial planners recommend a crypto allocation of 1% to 5.5% of your portfolio.
Adoption Mainstream

Waltman states that the primary factor driving Bitcoin’s price rise is the speed at which new customers are purchasing and exploring cryptocurrency.

She states that cryptocurrency technology is being adopted faster than the first internet technology was adopted by humans. It is possible that the exponential acceleration of new adoption will continue, pushing Bitcoin’s value higher and higher.

According to CoinShares, bitcoin adoption has increased at an annual rate in excess of 113%. The internet was adopted at a slower pace (63%), however. If Bitcoin adoption rates are comparable to those of the early internet days (or faster), then the report predicts that there will soon be 1 billion and 4 billion Bitcoin users by 2030.
CoinDesk reported last month that there were 66 million new wallets around the world, up 45% in just one year. Coinbase, the popular cryptocurrency exchange, says it now has over 73,000,000 users around the world. Gemini, another crypto exchange recently released its “State of U.S. Crypto Report,” which showed that 21.2 Million Americans own some type of cryptocurrency.

Recent months have seen federal officials make it clear they are paying close attention to crypto. Recently, industry professionals mentioned that Bitcoin’s slow price was due to federal regulation they perceive as being “hawkish”. CoinDesk First Mover Seth Ginns stated that the Fed had moved to a “hawkish” position on crypto regulation just as Omicron began to tick up in America. This could have led to increased doubts in crypto’s viability, which in turn could have contributed to January’s bearish sentiments.

Many questions remain unanswered about crypto regulation. President Joe Biden recently signed an Infrastructure Bill that required all crypto exchanges and banks to inform the IRS about any transactions. Janet Yellen, Treasury Secretary said that stablecoins (a type of crypto tied to the U.S. dollars) should be subjected to federal oversight.

Flourish, a fintech platform that focuses on investment advisors, stated that the current conversation around regulatory policies is “patchy.” A relatively new asset type like cryptocurrency means that any new regulation could have an impact on its value.

Investors saw Bitcoin prices drop after China banned cryptography in September 2021. But it has since recovered its volatility and has risen again. The Securities and Exchange Commission, despite having a decade of experience with Bitcoin, is making all decisions on each case individually. Experts call it its “crawl-walk-run” strategy to mainstream crypto adoption.

“[Regulation] has kinda evolved over the past five years,” Ben Cruikshank (head of Flourish), “Regulators are always able to change their mind.”
Mining Cycles

Another factor that has a significant impact on Bitcoin’s prices is the halving cycle. While it is complex and algorithmic, the essence of halving in Bitcoin mining is a step that reduces the reward to mining Bitcoin transactions.

Halving can affect the rate at the which new coins enter circulation. This can have an impact on the value and the liquidity of your existing Bitcoin holdings. The boom and bust cycles have been correlated with halvings in the past. Experts try to predict these cycles as soon as possible after a halving event.
What investors should know about Bitcoin Price Projections

As with all investments, financial advisors and other professionals advise against letting Bitcoin’s price fluctuations influence your emotional decision-making. Research has shown that investors who regularly contribute to passive index funds or ETFs do better over time due to dollar cost averaging.

Experts advise not to invest more than 5 percent of your total portfolio in cryptocurrency. They also recommend never investing at the expense saving for emergencies or paying down high interest debt. A diversified portfolio, including low-cost index funds and crypto, is the best way to build long-term wealth.

Experts say that even with crypto, a set it and forget it approach is sensible. Sarah Catherine Gutierrez (certified financial planner in Arkansas) says passive investing can be a legitimate way to achieve your financial goals.

Because crypto is still relatively new, it’s a good idea to wait to see how things develop before investing. Only 10 years of data are available for crypto price predictions. Bitcoin’s value is highly volatile and, while it could rise over the long-term, it is still very likely to fall daily.

Volatility can make it difficult to determine the “what”, and “why,” behind your crypto strategy. Before you invest in Bitcoin or other assets, think about what you want from this volatile market. This will help keep you focused.

Gutierrez states that not everyone understands how to value Bitcoin. “You need to be clear about what value you expect from it when you purchase it.”

Gutierrez said that financial planners do not have a bias against crypto, especially when clients express interest in learning more. You should consider whether crypto is necessary as part of your financial plan. Gutierrez states that the majority of cases are not suitable for crypto.

“Our conclusion is that you don’t need Bitcoin to reach your financial goals,” she said. She also stated that simple, easy-to-understand ways to invest are the best. This will ensure you are on the right track to your financial goals and help you plan for a happy retirement.