Since its introduction in 2009, Bitcoin, the oldest crypto in the world, has raised the attention of enthusiasts, investors, and, recently, regulators. The acolytes of Bitcoin don’t see it just as a currency form but also as an exciting technology that introduced the concept of decentralization and established the foundation for a new economy type, namely the crypto market.
On the other hand, for some people, Bitcoin has always been a way to make a quick buck, and while some may have succeeded in joining other Bitcoin millionaires, it’s worth noting that others have lost hundreds, even thousands, of dollars when predicting price movements and trying to take advantage of every opportunity. Over the years, Bitcoin has been subject to many price fluctuations, which were sometimes extreme, and while great highs are indeed a possibility when investing in this cryptocurrency, the same is true for catastrophic lows. So, in the journey of learning how to buy Bitcoin, it’s essential also to assess the risks involved in this kind of investment, monitor the Bitcoin price, and create a strategy that will help you navigate the complexities of this dynamic market.
What to expect from Bitcoin in the next few months
At the time of writing, Bitcoin, the world’s major cryptocurrency, is at a crossroads, so everyone is wondering whether the asset will break free from its current resistance and rise above the BMSB or remain tethered below.
According to market analysts, Bitcoin could experience a left-translated peak if it follows the same pattern as in 2013, reclaiming the BMSB and holding it as support over the following 1-2 months, resulting in a rally in Q4. Overall, there is a bullish sentiment around the future of Bitcoin, with market experts forecasting that the asset will reach $100,000 by September 2024. The latest innovations in the Bitcoin ecosystem definitely play a major role in triggering a potentially bullish scenario – for instance, the increased adoption of the Lighting Network could promote a growing adoption of Bitcoin as a payment method, enhancing its overall utility and making it more than just a store of value. Traditional banking frameworks’ sturdiness (or the lack of it) is another factor that could trigger a bullish future for Bitcoin.
Currently, the global economy is facing major issues, with the US experiencing a banking crisis and rising debt obligations. While bank failures were prevalent in 2023, it’s essential to notice that the underlying issue of these failures is still there, and if bank failures continue happening this year, the government will have no choice but to offer stimulus or print more cash, which would devalue the US dollar and put Bitcoin in the spotlight, strengthening its position as a fair and resilient asset which offers a fixed supply.
Although a bullish scenario is possible, it’s worth remembering that all investments have a downside, and that’s also the case for Bitcoin. There has been an ongoing debate over the inscriptions on the Bitcoin blockchain, and while their potential is undeniable when it comes to generating sustainable fees for the long run, according to some opinions, they congest the network and complicate the mining process. And there are, of course, the environmental considerations – if Bitcoin continues to face criticism because of its energy consumption, that could deeply affect its price action.
So, is it a good idea to invest in Bitcoin right now?
Investing in Bitcoin comes with both advantages and risks, and it’s essential to understand them to make an informed decision. Suppose governments continue to target Bitcoin and politicize its energy consumption further; this could put significant pressure on the long-term sustainability of the asset. Furthermore, there’s another concern when it comes to Bitcoin, namely related to its lackluster adoption and demand which could threaten the network and negatively impact its security.
Just as there’s a strong likelihood of a bull case for Bitcoin, a bear case isn’t out of the question either, as previously discussed. Ultimately, it’s up to each investor whether they want to take the risk and invest in Bitcoin, but before doing it, it’s essential to take the time to reflect on your motivation: are you buying Bitcoin because you believe in its long-term potential or due to FOMO? If it’s the latter, then it may not be a good idea to invest in Bitcoin. Otherwise, Bitcoin is among the best-performing assets; it’s inclusive, censorship-free, and an excellent medium of exchange.
However, our advice would be to avoid becoming overexposed to Bitcoin – in other words, don’t put all your eggs into one basket. Instead, you should aim for portfolio diversification, but keep in mind there’s no one-size-fits-all solution for this strategy, and it all depends on your risk appetite and financial goals. For instance, you can diversify into different crypto assets, like utility tokens such as BNB, Solana, and Ethereum, or put your money into the best penny cryptocurrencies like Dogecoin and XRP, to name a few. And of course, there’s always the alternative of investing in non-crypto assets, like stocks, bonds, and index funds.
The bottom line
There’s no doubt that Bitcoin holds massive potential, but investors shouldn’t overlook its risks either. It’s imperative to consider your risk tolerance and investment goals before you put your money into cryptocurrencies like Bitcoin instead of doing it because of the hype around it. If possible, it’s also recommended to consult with a financial advisor, as they have the knowledge and expertise to guide you in making the right financial decisions that best fit your personal circumstances.
According to forecasts, there’s a likelihood that Bitcoin will reach g $1.48 million by 2030, stemming from expectations of enhanced global adoption, institutional investment, and a favorable regulatory framework. But as with any other investment, these are only speculations about the future of Bitcoin, and they should be taken with a healthy dose of skepticism. In fact, our advice is to balance optimistic forecasts with careful research and risk assessment and stay updated on the latest market insights.
