Bitcoin is on fire again - but what's new? Bitcoin has rallied up a whopping 80% this year, and it's only April. It shot far ahead of the 7% surging past the S&P 500, and everywhere you look, experts think we're entering into a bull market. But there's logic to Bitcoin's rise, and there will be logic to Bitcoins fall - there's only so long a coin stays on fire before people begin to get burnt, and if you're not careful, the burn will sting like an unsuspecting hornets wasp on a summer's day. Below, we'll explore why Bitcoin is on fire and how to avoid feeling the burn.
Bitcoins Burning 2023 Success
Bitcoin is the OG of the cryptocurrency world - people who invested $100 when the Bitcoin price value was $3.19 in 2012 would now have over $1 million in their bank account. There may never be a coin that yields the same astronomical trajectory that Bitcoin and Ethereum - the other crypto OG - achieved.
Over the years, the individual who invested $100 would have noticed sharp rises and falls in the value of their investment based on numerous factors. Recently, the value of the coin topped $30,000 for the first time since June 2022, and experts heavily attribute this to the link between interest rates and the uncertainty of the centralized economy.
But as the Federal Reserve slows down the rise in interest rates that's created a consumer living crisis, gains in tech stocks and risk assets increase. Thanks to the gradual reduction in interest rates, Bitcoin investments have increased 78 per cent week-on-week in 2023.
Historically, other factors influence Bitcoin's fluctuation in value. Often, as with all coins, media heavily influences the outcome of rises and falls in crypto value. The overall sentiment of the market towards Bitcoin can also impact its value. Positive news and events related to Bitcoin can create a bullish sentiment, while negative news or events can create a bearish sentiment.
Currently, the sentiment is that Bitcoin is on the rise, but is that a recipe for a burning Bitcoin investment - to trust the positive media circulating and the evidence of value increase?
Have You Missed The Bitcoin Investment Boat?
Well, it could be a recipe for the right time to invest because there's one event that's happening in the near future that will send Bitcoin value to new heights - the Bitcoin halving.
In roughly 12 months, Bitcoin will halve the number of coins free to mine, meaning there won't be as many coming into circulation. The software that Bitcoin functions from is programmed to periodically halve. The next halving should happen in April or May 2024, reducing the mining reward from 6.25 to 3.125 Bitcoins for each block of transactions. With fewer tokens coming into circulation, the value increases.
Interestingly, the recent news about Bitcoin's success, coupled with mistrust in centralized banks after multiple bank closures in the US and across Europe, has led to small investors wanting a piece of the Bitcoin pie. The number of wallets holding 0.01 of Bitcoin, equal to about $300, has risen by 3%. Experts predict that the current value will hold at around $25,000 to $35,000, but after the halving, it could increase to above $150,000 based on estimations of previous halvings. Those with $300 of Bitcoin in their wallet could see their investment increase five-fold.
Now, the question is, is now the best time, or have you missed the boat? Granted, the value of the coin is slightly more expensive compared to the beginning of the financial quarter, but that isn't to say that now isn't the best time, especially if predictions of value increasing to over $150,000 come true.
Alternative Coins Worth Exploring
Some people are intimidated by the value of Bitcoin, especially small-time investors who find it more appealing to have what seems like more and are more interested in playing the long game. The cryptocurrency market is flooded with coins that are waiting for their time to shine, and there are some promising investments that experts recommend you should explore and research. Here are five of the top-rated for 2023 and their current value as of 04/19/23.
- XRP - $0.490363
- Dogecoin - $0.09
- Cardano - $0.42
- Terra 2.0 - $1.39
- Avalanche - $19.30
Still, when researching, you'll find that most websites recommend an investment in Bitcoin, and if you're going to invest $300 in anything, is it not wise to consider an investment you know is going to increase substantially, even if not to $150,000, over coins that might take years to even double an investment? That's where the cryptocurrency risk factors in. It's tricky to estimate the future of a coin.
Bitcoin is definitely on fire right now. The value is holding steady, but the fire is slowly burning away in the background as the market prepares for the halving - evident when you consider how many small investors are taking a piece of the Bitcoin pie. It's essential to research the coin and what external factors might influence the outcome of the halving. The negative press could dramatically halt the increase, for example.