When it comes to cryptos, there are so many rumors and buzz, it becomes difficult to differentiate rumors from sensible arguments: in today’s article, we are going to discuss arguments that support a forecasting that sees Bitcoin hitting the 1 million price mark.
Importance of knowledge before forecasting and speculating Bitcoin price
The first thing to do when predicting Bitcoin and other cryptos prices is to equip yourself with proper knowledge. Without knowledge and a basic understanding of how cryptos and their underlying blockchain technology works, it is impossible to know if certain arguments are true or not.
When you know how something works, it becomes exponentially easier to understand how under certain conditions things may unfold.
Many new investors see trading cryptos as a way to make money and attain financial freedom. But doing so without certain skills and knowledge will ensure failure.
The trading knowledge base provided here will teach crypto and currency traders how to open a position, set stop loss, take profit, and analyze crypto markets.
There are also valuable resources about risk management, which is key to not losing money. And trading strategies also offer the ability to plan ahead and avoid emotional imbalance when trading.
Diving into the practical side of trading can help beginners acquire fundamental skills and knowledge about trading. After understanding the basics of trading, it is important to discuss the factors that can affect Bitcoin prices and offer an analysis framework to define future trends.
Which factors increase Bitcoin price?
There are several factors that have a high potential for increasing the Bitcoin price
- Increase in adoption – the adoption of BTC is increasing by the day and many investors are trying to buy bitcoin to make profits when prices will start to rise again.
- Limited supply – Scarce resources tend to gain huge prices when demand increases. Since Bitcoin is limited to 21 million, it increases the price of Bitcoin constantly as the number of maximum Bitcoins is limited. Additionally, Bitcoin is a deflationary asset as its supply remains capped at 21 million Bitcoins, and rewards for mining are halving every four years.
- Institutional acceptance – As giants like Tesla and others talk about BTC and even buying it, this can promote Bitcoins price as institutional buyers tend to invest in long-term assets. Institutions always research the market before investing in it and since many investors are buying BTC this can be seen by the average person as a good chance to jump in and buy Bitcoin.
- BTC is a digital gold – Some bestseller authors like Robert Kiyosaki call Bitcoin a digital gold, and they have an argument. Bitcoin just like Gold has the potential to save value and protect wealth in times of economic crisis and uncertainty.
As long as there is data that support Bitcoins increased adoption claims and institutions continue to buy more Bitcoin, the prices are predicted to continue rising.
Bitcoin is better than Gold: top arguments
Although many investors believe that Bitcoin is digital gold, there are strong arguments that indicate that Bitcoin is better than gold.
- Portability – Bitcoin can be stored in digital wallets and transferred across the border much easier than gold. It is possible to move wealth with Bitcoin across the world with a single transaction. This alone makes Bitcoin a much better option than gold when it comes to transferring money and moving wealth. When using gold, you will need to declare it before you can travel. Since gold is a physical asset, it is harder to store.
- Divisibility – it is possible to divide bitcoin into very small units, making it easier to use it for everyday transactions when needed. Gold can not be divided to the same degree.
- Supply – gold is mined every day and its supply is always increasing, while for Bitcoin there are 21 million total coins and its mining rewards are halving every four years, making it a deflationary asset. Bitcoin in this regard beats gold without contest.
- Transparency – all transactions are stored on the blockchain and are accessible to the public when it comes to Bitcoin, whereas tracking the gold transactions is more difficult.
- Security – Bitcoin is protected by cryptography and all transactions are stored on a blockchain which is unbreakable. The Bitcoin network is decentralized, meaning it is not controlled by any authority.
- Accessibility – Bitcoin is easily bought and sold via multiple exchanges and peer-to-peer transactions, while it is harder to buy and hold gold.
- Flexibility – Bitcoin is very flexible to use, from day-to-day transactions to storing the wealth it is more flexible than gold. Gold is not used for transactions and is mainly a way of storing value.
With all the arguments above on Bitcoin’s side, it is clear why its price is so high and has the potential to reach the moon.
Forecasting: is Bitcoin at $1M inevitable?
With increased adoption and decreased rewards for mining, Bitcoin’s supply is limited while demand increases by the year.
The price will rise with almost 100% certainty. Bitcoin holds great value as it is possible to transfer money from country to country without limits, faster, and cheaper.
This ability to quickly store and move wealth and its flexibility paired with increased adoption and scarcity make Bitcoin the perfect asset to invest in. If the price hits 1 million per Bitcoin, the total market capitalization of bitcoin will be 21 trillion dollars.
To take it into perspective the total world economy is about 100 trillion dollars and the crypto market is about 1.21 trillion.
The most realistic price for Bitcoin is about 100k, as it is a very realistic number. Since the price of Bitcoin is only going to rise, it is a super attractive digital asset right now.