Cryptocurrency investors around the world can agree that the first two quarters of 2022 have been an absolute disaster in terms of the value of their investment. Bitcoin has decreased in value 70% from its all-time high of about $70,000. This massive drop has long-term investors wondering where the bottom is. Here is what you need to know.
What Determines the Price of Bitcoin?
Bitcoin’s price is determined by something similar to supply and demand. The price decreases when more people are selling BTC. When more people are buying Bitcoin, the price goes up. During the Crypto Crash, many people started selling off their Bitcoin and other cryptocurrencies in fear that they’d lose their money.
That isn’t the only thing that influences the overall price of Bitcoin though. Cost of production, regulation and news about crypto all have an impact on the price of Bitcoin too. Actually, tweets about cryptocurrency have been known to impact its overall price. Is there a chance that Bitcoin could fail?
The Future of BTC is Uncertain
At the end of the day, Bitcoin and other cryptocurrencies are still volatile investments. There is no guarantee for the future value of BTC. In fact, there is a chance it could drop down to $0, though many people believe we are closer to the bottom than we may realize.
If Bitcoin somehow dropped down the $0, it would not only have an impact on traders, but it would have a profound effect on other digital currencies. Because of its popularity, it would seriously hurt the financial system as a whole. Not to mention, all of the institutions that exist because of cryptocurrency and BTC like Binance, Coinbase, etc. would all come to an end as well.
Knocking BTC down to zero wouldn’t be easy to do, but the issues the coin has with its scalability put its future at risk. So, there is a chance it could come crashing down, but it would be difficult and it is unlikely.
For those invested in Bitcoin, watching the prices come tumbling down was devastating. It has left many people trying to predict where the bottom is and how long they can hold out.
Is This the Bottom?
Unfortunately, we still probably haven’t reached the bottom for Bitcoin. Crypto experts have predicted that it will level out at around $15,000 in Q3. It is not possible to determine where the bottom will be though. Right now, there are a number of uncertainties with the economy and several other factors. It is difficult to forecast where the bottom will be.
As I mentioned in a recent post, I have put my personal crypto investments on hold for the time being. Investing in cryptocurrency is a lot like gambling in a casino. You can only bring what you can afford to lose. Because of its volatility, Bitcoin and other cryptos still aren’t solid long-term investments.
If you are determined to invest in Bitcoin, wait a little while longer. Many experts predict that the crypto market will recover with the rest of the economy, we just don’t know when.
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Drew Blankenship is a cryptocurrency investor, family man, father and lifelong automotive enthusiast. He lives in North Carolina with his wife, daughter and their dog Enzo.
