The year has been a rough start for Bitcoin, which has been stuck around $40,000 in recent weeks, but has recently broken out, rising above $47,000 at one point. The market surged in March following Biden’s new executive order on cryptocurrencies. The order directs government agencies to coordinate strategies for regulating cryptocurrencies. Crypto experts say it could bring more stability to the cryptocurrency market in the long run.
In addition, due to the Russian-Ukrainian conflict, Bitcoin has also experienced frequent fluctuations. In the ups and downs, Bitcoin’s current price is a far cry from its latest all-time high set last November, when it surpassed $68,000. But even with the recent price drop, bitcoin is still more than twice as valuable as it was a few years ago.
Such ups and downs are nothing new for Bitcoin. Over the years, the price of Bitcoin has maintained an increase in volatility. Bitcoin investors have been curious about how high it can eventually rise. But Bitcoin’s price is extremely difficult to predict, and it is more susceptible to market factors than a mature asset class. At the end of last year, many voices believed it would hit $100,000, but it has pulled back from its latest highs in November, and as Bitcoin has fallen sharply, predictions have become more difficult, but people are still enjoying it.
Adoption, Regulation and Development
The market’s most extreme crypto skeptics say Bitcoin will fall to the low $10,000s in 2022, but the middle ground could be that the cryptocurrency can still climb to $100,000 as many experts predicted late last year, just The timeline is slower.
But with mainstream adoption, more attention and research at the regulatory level, and the involvement of factors such as supply and demand, public sentiment, news cycles, uncertain market events, etc., Bitcoin forecasting as an emerging asset has become more complex . And more players means that the market also needs to be reassessed in light of new circumstances.
According to data from digital asset management firm CoinShares, Bitcoin adoption is growing at an annual rate of 113%. Meanwhile, people were slower to adopt the internet at 63%. If enthusiasm for Bitcoin is comparable to the early days of the internet (or faster), the report suggests the industry will have 1 billion users by 2024 and 4 billion by 2030. Crypto adoption is taking place faster than humans first adopted the internet, and assuming it continues, the compounding acceleration of new adoption may continue to drive Bitcoin higher and higher in value.
Furthermore, cryptocurrency regulation brings many unanswered questions. Biden recently signed an infrastructure bill requiring all cryptocurrency exchanges to notify the IRS of their transactions. Additionally, Biden’s crypto executive order directs government agencies to coordinate strategies for regulating cryptocurrencies. And recently Russian officials said they are willing to accept Bitcoin for natural resource exports… Various policies have an impact on the short-term volatility and long-term development of the crypto market. Arguably, the multi-party regulatory policy dialogue has been uneven. For a relatively new asset class like cryptocurrencies, any new regulations have the potential to affect its value.
And for the average investor, many crypto experts advise against investing more than 5% of your overall portfolio in cryptocurrencies, and never at the expense of emergency savings and paying down high-interest debt. For people with diversified investments, the path to long-term wealth and retirement savings is often a success, and cryptocurrencies are only a small part of it. But at the same time, some analysts believe that for high-net-worth investment clients, when clients are interested in learning about encryption, they are not biased against cryptocurrency and should have a broader understanding.
Additionally, investors continue to be bullish on cryptocurrencies, according to a recent Goldman Sachs survey. Goldman Sachs surveyed 172 clients, and 60 percent of respondents expected to increase their digital asset holdings in the next one to two years. Of those who expressed enthusiasm for cryptocurrencies, 32 percent said they expected to “significantly increase” their cryptocurrency holdings. Meanwhile, 51% of clients reported exposure to cryptocurrencies, compared to 40% last year. According to the survey, about 55% of respondents are willing to allocate up to 5% of their total assets to cryptocurrencies. The Goldman Sachs report also shows that DeFi, altcoins and NFTs are attracting the attention of institutional investors. Clients continued to show strong interest in BTC and ETH, with 22% each; 15% of respondents were interested in altcoins, 14% in DeFi tokens, and 9% in NFTs.
There are also analysts who believe that for the average investor, since cryptocurrencies are still new to most people, they can wait and see how things develop before investing their money. Bloomberg commodities strategist Mike McGlone believes that bulls risk assets may be fighting the Fed. He noted that Bitcoin, which may be the riskiest investment in existence, faces resistance as interest rate hike expectations rise. However, McGlone also acknowledged that Bitcoin is proving its worth in a manner similar to 2020, when transactions on the decentralized crypto network were relatively liquid relative to the stagnation and restrictions of stock futures.
Controversial market views
Marion Laboure, an analyst at Deutsche Bank Research, said people have been looking for assets that are not controlled by the government. Gold has played this role for centuries. I can see that Bitcoin has the potential to be the digital gold of the 21st century. Let’s not forget that gold is also historically unstable. But importantly, Bitcoin is risky and is too volatile to be a reliable store of value today. And it will remain super volatile for the foreseeable future.
Prominent trader and broker Jim Iuorio said that while Bitcoin has traded between $35,000 and $45,000 since Jan. 5, that range is quite modest given its history of volatility, marking an expectation A long period of stability may begin. Iuorio explained that the stabilization of the largest cryptocurrency by market cap could be influenced by several key factors: A weakening dollar and rising inflation amid ongoing geopolitical turmoil Money is a safe haven against inflation; the Fed “continues to raise rates” as it scales back its bond program; more government regulation. As cryptocurrencies like Bitcoin become more regulated and transparent, people will become more comfortable using them.
Mike Novogratz, founder of Galaxy Digital, shared his expectations for Bitcoin in the next 5 years when he was a guest on Bloomberg TV: If Bitcoin does not reach $500,000 in 5 years, then my judgment on this matter is wrong. We are seeing bitcoin being adopted by more and more institutions, and bitcoin and cryptocurrencies grew much faster than ever last year, faster than in the 90s when the internet was at its best. And this trend is still expanding, and pension funds in the Middle East, or in the United States, are also ready to participate.
Apple co-founder Steve Wozniak expects Bitcoin to hit $100,000. “There is a very high level of interest in cryptocurrencies, and I feel it,” he explained. Wozniak also shared his experience with bitcoin investing, stating that his purpose was “to play, to experiment, but not to make money.” However, he It was also noted that on two occasions money was made as a result of Bitcoin’s surge.
Microsoft co-founder Bill Gates has warned individuals not to invest in bitcoin unless their name appears on the Forbes rich list. Pointing to the high volatility and decentralized system of cryptocurrencies, he said Bitcoin’s value could be affected by something as simple as a tweet from Tesla and SpaceX CEO Elon Musk. Bill Gates said Musk has a lot of money and he’s very sophisticated, so I’m not worried about his bitcoin going up or down randomly. I do think that people caught in this frenzy probably don’t have as much spare cash to spend, so I’m not bullish on Bitcoin. If you have less money than Musk, you should probably be cautious. Meanwhile, the Microsoft co-founder spoke highly of cryptocurrencies, emphasizing that digital currencies are a good thing when it comes to funding poor countries.
Morgan Stanley CEO James Gorman said: Bitcoin is a speculative asset. But it’s not going to replace the reserve currency, that’s not going to happen. My advice is to not invest more than 1% of your net worth.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/volatility-and-rise-what-do-crypto-analysts-think-about-the-market/
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