Bitcoin Price Predictions: What's Shaping its Future? Bitcoin is the first and most popular decentralized cryptocurrency in the digital asset market that sits within a public distributed ledger known as a blockchain where crypto enthusiasts and experts can invest, mine, and trade the asset class to impact its value.
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur Asia Pacific, an international franchise of Entrepreneur Media.
Among the values of all digital asset classes, Bitcoin price remains the most unpredictable on the cryptocurrency market. As investors prepare for the currency's boost following a successful halving event, there are integral predictions and insights worth considering before making long-term investment decisions.
Bitcoin Price in the Context of Market Cycles
Bitcoin is the first and most popular decentralized cryptocurrency in the digital asset market. The Internet currency sits within a public distributed ledger known as a blockchain where crypto enthusiasts and experts can invest, mine, and trade the asset class to impact its value. Since Bitcoin's launch in October 2010, several price cycles have occurred.
Following a lengthy "crypto winter" during and after the pandemic, Bitcoin seems to be making a return to relevance. The digital currency's most recent consolidation and halving event, which took place in April 2024, has led to significant price movements that crypto professionals believe could spark a historic bull run. With the persistence of these current trends, the future of Bitcoin appears bright compared to the last few years on the market.
What are the Key Drivers of Bitcoin Price?
Key factors affect Bitcoin's price, including adoption trends, macroeconomic factors, and regulatory developments.
Adoption Trends
In January 2024, the US Securities and Exchange Commission (SEC) authorized spot bitcoin exchange-traded products (ETPs). This decision continues to drive institutional acceptance and interest, allowing global adoption in the cryptocurrency market. As the digital asset integrates with more traditional financial systems in the future, seasoned traders and investors anticipate an increase in Bitcoin's value.
Regulatory Developments
Over the past year, government regulators like the SEC and the Commodities Futures Trading Commission (CFTC) have pushed to pass and approve increasingly flexible rules regarding Bitcoin. In September 2015, the CFTC officially declared the asset class a commodity, ultimately leading to the SEC's authorization this January.
Alongside the January decision, the SEC permitted options contracts on specific spot Bitcoin exchange-traded funds (ETFs). ETFs and ETPs make up a significant part of institutional investments, which has a greater impact on Bitcoin's price.
Macroeconomic Factors
Besides adoption trends and regulatory developments, several macroeconomic components could affect Bitcoin price movements. Interest rates and inflation could also influence Bitcoin's status and value.
Approximately every four years, Bitcoin is mined during halving events. As more Bitcoin is mined at these halving events, the currency could experience inflation. However, halving balances out crypto mining by reducing Bitcoin's value by 50% at each event. This reduction allows the digital asset's inflation rate to decrease.
Technical Indicators to Consider in Bitcoin Price Forecasts
While technical analysis tools are more complicated to maneuver, they can serve as an indicator for making predictions on Bitcoin price movements. Some technical analysis resources may include:
- Moving averages - This technical analysis tool can calculate Bitcoin's average price over a specific time frame. This resource can assist traders by steadying any indicated price fluctuations and helping them identify the trend direction.
- Relative Strength Index (RSI) - This indicator is a momentum oscillator used to analyze the strengths and weaknesses of a stock or financial market. An RSI tool measures the size and speed of price fluctuations on a scale between zero and 100.
With the guidance of these technical tools, traders and investors can easily navigate Bitcoin's volatile price movements.
Global Occurrences Impacting Bitcoin Price
Adoption trends, macroeconomic factors, and regulatory developments aren't the only components impacting Bitcoin price. Global occurrences such as economic shifts, geopolitical instability, and market crashes could negatively affect investor sentiment.
If investor sentiment pushes against Bitcoin rather than favoring it, its value could decrease.
Bitcoin Price's Future Outlook
Throughout 2024, Bitcoin has encountered several factors, including a historic halving event, that could lead to a combination of positive and negative outlooks on the cryptocurrency. Concerns of inflation remain despite the new Bitcoin being cut in half. For investors and traders, both novice and advanced, taking price predictions with a grain of salt may be necessary.
Bitcoin's future appears bright post-election in the US. However, market sentiment, adoption, and government regulations will continue to influence its volatility.
Furthermore, utilizing technical indicators while monitoring price dashboards and live charts could guide your decision as the leading digital asset faces potential catalysts ahead.
