Trying to forecast and predict the value of Bitcoin moving forward is just as hard as trying to forecast and predict the stock market and what it might do moving forward. But using trends and the active movement of buying and selling of the cryptocurrency, experts can give a pretty good idea of what the Bitcoin futures will be. Still, don’t expect deciding on what to do about Bitcoin in the month of March to be as easy as filling out your March Madness bracket.
There are many things that can affect the price of Bitcoin, just as any other commodity out there. Even though there is no real backing to Bitcoin, like banks and governing bodies who back paper currency, therefore Bitcoin is affected by true capitalist tendencies. Although there is a maximum supply cap for Bitcoin, set at 21 million coins, there are currently only around 19 million in circulation. This leaves almost 2 million left to be mined.
Most of the current predictions have the month of March 2022 being a strong month of high value for Bitcoin. At its current price of around $43,000 per coin, it appears that the March price will soar to over $70,000 per coin. This spells extremely well for those that currently are holding on to Bitcoin, but could be more difficult to enter as the price grows entering the month of March.
Predictions past March also show that Bitcoin could continue to trend up in the months after March, possibly peaking at over $100,000 in the month of May. Trends past May see the price of Bitcoin declining after its peak and continuing to decline throughout the rest of 2022, but ending predictions show that Bitcoin will finish above $65,000 per coin on the year.
Bitcoin tends to run on a four-year cycle, the last one rolling over in 2020, which shows that at the beginning of each year of the four-year cycle the price starts relatively low, at least compared to where it finished the last cycle, and then grows rapidly in the early part of the year before tapering off. It appears that 2022 will follow the same pattern. But what makes these fluctuations happen?
When it comes to the price of Bitcoin, it is highly affected by the market’s supply and demand of Bitcoin itself. If more people want to buy Bitcoin than there is a supply of Bitcoin to buy, then the price goes up. When there is a bigger supply than there are buyers of Bitcoin, then the price goes down. It is very similar to the real estate market and the stock market.
There are some other ways that the price of Bitcoin can be altered or affected. Other competing cryptocurrencies and their prices or popularity can have an effect on Bitcoin, especially if people are jumping ship to those other cryptos. There are also rewards for successfully mining Bitcoin. When the rewards are low, less Bitcoin is mined meaning less supply, which affects the supply and demand. News stories about cryptocurrency can also have an effect on the price of Bitcoin
Although Bitcoin and most other cryptocurrencies are not affected by governing bodies, as they continue to rise in popularity and begin to be used as a form of mainstream currency, there will no doubt be rules and regulations that come into play. These rules and regulations could be wide in variety but they could affect the price of Bitcoin tremendously and bring them down to a more realistic level.
These regulations could be put in place to govern the sale and use of Bitcoin, which would change the market value of Bitcoin, especially if there are fees and taxes that are associated with it. More regulation and control over a commodity usually brings fewer users and therefore lowers the price of the commodity. Bitcoin will ultimately do the same thing.
If you are into or invested in Bitcoin, be sure to continue watching trends and new rules and regulations that will affect the prices of the commodity. Stay on top of the game and be ready to react quickly.
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