Future Of The Crypto Market

The Intensive research made by the analysts and the tech geeks has brought it to our insight that our global cryptocurrency market will be more than triple by 2030, hitting a valuation of nearly $5 billion in the coming times. Tech wiz or people who have profound knowledge in this field see limitless potential, while critics who seek to debate see nothing but risk.

IS CRYPTO VIABLE FOR INVESTING IN THE FUTURE ?

There’s always a debate, about whether one should dip their hands in the pool of investment. When we talk about crypto investments in the future, it is said to be risky by some and potentially extremely profitable by others. One important point to be understood is that investments are risky but it’s highly profitable when a person has a good insight about where to invest and when to invest.

To be on the safer side with relatively less risk, an alternative is to buy stocks of companies with exposure to cryptocurrency. Many cryptocurrencies such as the profoundly known ‘Bitcoin’ and ‘Ethereum’ are launched with high objectives, which may be achieved over long time periods. It’s been said that early investments in crypto-based projects can lead to rich rewards in the long term.

WHAT FACTORS INFLUENCE BITCOIN’S PRICE?

We all have heard and are knowledgeable about the general economic factors that influence the price of an investment such as – supply and demand, public sentiments, the news cycle, market events, etc. But, Bitcoin as an emerging asset, additional factors influence its value more than the average currency or security.

Hereby are some factors that affect its price: 

SCARCITY

It has been speculated that there are only 18 to 19 million Bitcoins currently in the market in circulation and minting will stop at 21 million. Many leading experts have pointed out that Bitcoin has value because it has a psychological effect on people’s minds.“That’s really why everybody is going crazy over buying bitcoin. Thus, making it difficult for the average consumer to anticipate whether Bitcoin and other cryptocurrencies are legitimate or not.

It has rightly been said, the whole concept of supply and demand only works or operates when people want something scarce – even if it previously didn’t exist at all. An expert has expressed his views and analysis on this subject as if the crypto market is not transactional in cash, one doesn’t really have the money because in this kind of market anything can drop dramatically overnight.

That’s why certified financial planners and analysts suggest only allocating 1% to 5% of your portfolio to crypto, in order to protect your money from the unstable market.

MAINSTREAM ADOPTION

One of the main factors driving the price increase or inflation of bitcoin is the rate at which new consumers are buying and exploring the cryptocurrency in the market. According to recent statistical data, bitcoin adoption has been increasing at an annual rate of 113 %. Popular crypto exchange platform ‘Coinbase’ stated that it has now over 73 million worldwide users.

REGULATION

Crypto regulations can be good and bad depending on the situation and to different people it can affect them differently. One noticeable regulation in 2022, we can see is that when the U.S president signed an infrastructure bill requiring all crypto exchanges to notify the IRS of their transactions. It’s been seen that regulation has kind of evolved over the last five years and also it’s been said and very well known that ‘Regulators can always change their mind’.

MINING CYCLES

There is another major influence and importance on Bitcoin’s price that is a cycle known as ‘halving’. It’s a little complicated and algorithmic in nature but in its true essence halving is a step in the bitcoin mining process that results in the reward for mining Bitcoin transactions getting cut in half.