Bitcoin’s price has nearly doubled in the last 12 months, driven by stabilizing interest rates, the approval of BTC exchange-traded funds (ETFs), and a bullish rotation towards riskier assets. Despite this rally, Bitcoin is still more than 30% below its all-time high. This raises the question, should investors consider buying more Bitcoin now in anticipation of it reaching new record highs?
What has happened to Bitcoin in the past two years?
In November 2021, Bitcoin reached an all-time high of $69,044. This was fueled by factors such as low interest rates, stimulus checks, social media hype, and the popularity of commission-free trading platforms like Robinhood. However, by the end of 2022, Bitcoin’s value had dropped to around $16,000. This was largely due to inflation, rising interest rates, the failure of high-profile tokens and exchanges, and concerns over government regulations. Many investors also shifted towards more conservative investments.
What can we expect for Bitcoin in the next few years?
Bitcoin’s price has once again seen a surge in the past year, driven by hopes for interest rate cuts and the approval of eleven new Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) in January. These ETFs hold Bitcoin directly, making them more attractive to institutional investors.
Looking ahead, the upcoming “halving” of Bitcoin rewards in April is expected to reduce its available supply and potentially drive up its price. Furthermore, as more countries and businesses adopt Bitcoin as a mainstream payment method and more companies add it to their balance sheets, its value could continue to rise. Additionally, some investors view Bitcoin as a hedge against inflation, similar to gold or silver.
Despite these potential catalysts, analysts’ price targets for Bitcoin vary greatly. Standard Chartered predicts a price of $100,000 by the end of 2024, while CoinFund believes it could reach as high as $500,000. Fidelity and Ark Invest have even more bullish long-term predictions, with Fidelity estimating a price of $100 million by 2035 and $1 billion by 2038, and Ark Invest’s Cathie Wood predicting a price of $1.5 million by 2030.
Should you buy Bitcoin as its value continues to rise?
While Bitcoin’s price may remain volatile, its resilience suggests it could become a mainstream asset over time. Investors who accumulate Bitcoin as it rises this year could see significant returns in the future. However, it’s important to be cautious and do your own research before making any investment decisions.
The Motley Fool Stock Advisor has identified 10 stocks that they believe will produce significant returns in the coming years. While Bitcoin is not one of their top picks, their service provides guidance on building a successful portfolio and regular updates from analysts. Since 2002, the Stock Advisor has outperformed the S&P 500 by more than three times.
