Bitcoin is up 65% this year, bringing some optimism to crypto enthusiasts. Currently, Bitcoin is valued at around $76,000, surpassing its record high of $73,750 reached earlier this year, making a new record.
However, Bitcoin’s performance hasn’t fully matched investors’ high hopes. Despite surpassing a record high, it has struggled for months to break past the $70,000 mark. Some investors are opting to wait or diversify their investments, but does that mean it’s time to step back, or could this be an ideal buying opportunity?
How Investor Expectations Have Shifted
Before you can answer this question, you need to know how investors’ views on Bitcoin have changed over the past year. A lot of people were excited at the start of 2024, especially since new Bitcoin exchange-traded funds (ETFs) had just come out.
These Bitcoin ETF Trading and Investing gave easier access to investments in Bitcoin, fueling a surge that brought the price of Bitcoin to an all-time high in March. At this time, most analysts predicted that Bitcoin was likely to hit the $100,000 milestone in just a few months.
However, enthusiasm began to cool by August. Investor interest in the ETFs slowed, and a “flash crash” in the broader cryptocurrency market shook investor confidence. Prices of many cryptocurrencies dropped sharply, affecting Bitcoin’s upward momentum.
Additionally, there was a lot of anticipation around Bitcoin’s April 2024 halving event, which occurs roughly every four years. This reduces the reward for mining new Bitcoin. Historically, reduced supply due to this halving of reward has prompted price to rise.
Past three times that it happened in the year 2012, 2016, and 2020, all the instances triggered significant price jumps. But so far, this year’s halving hasn’t provided the same impact; Bitcoin’s price is just about 10% higher than what it was seven months ago. This has made investors uncertain about whether the halving will be impactful enough.
Comparing Bitcoin to Other Popular Investment Options
Bitcoin has not only failed on the internal expectations but also compared with other “risk-on” assets. Meme tokens such as Dogecoin and Shiba Inu have increased more than 70% in this year, and other meme coins have risen to a high of 1,000%. The cryptocurrency also lags behind crypto-related stocks, such as MicroStrategy, which is up 244% in 2024. Top tech stocks like Nvidia are up 190% in the year and offer alternatives to investors.
Factors That Could Influence Bitcoin’s Future
Looking ahead, the 2024 U.S. presidential election might be a real game-changer for Bitcoin in terms of new regulatory approaches. For the first time ever, crypto regulation has become an issue in major campaigns and, more importantly, policy discussion in Washington, D.C.
On a more macro level, Bitcoin is gaining institutional finance recognition. The investment firms are launching crypto-related products, and the massive financial institutions are considering including small percentages of crypto in their portfolios. If these institutions can find even 1% to put into Bitcoin, that’s a lot of new money coming into the market.
The Long-Term View on Bitcoin
A long-term view is something you should be thinking about if you are thinking about Bitcoin. It may not have lived up to the high hopes for this year and has lagged behind other risky investments, but the overall future outlook for its future is still good.
Some financial experts forecast that Bitcoin could reach $1 million by 2030, based on its historical trends and growing acceptance.
Looking further down the road, Bitcoin’s price predictions are even more ambitious, with some suggesting it could reach record levels in the decades to come. Although speculative, these projections emphasize Bitcoin’s potential and the enthusiasm for it as a long-term digital asset.
In the end, many view Bitcoin’s historical growth and resilience as reasons to believe in its potential for solid returns over time.