Boom to bust or moon landing? The price volatility of Bitcoin explained

The launch of Bitcoin dates back to January 2009. It is credited to the efforts of Satoshi Nakamoto. While the actual identity of Nakamoto remains a mystery, it is becoming clearer every day that the goal is to have a decentralized and digital currency for people across the world. One of the few drawbacks that it has been experiencing pertains to volatility. This is evident from the most recent fall to a value of less than $40,000 hours after it surpassed the milestone of $47,000.

That raises the question of whether Bitcoin is headed toward a new height or if it will crash terribly by the end of 2024.

Boom times: Understanding past surges

It is obvious to say that there have been several ups in the valuation of Bitcoin since its inception. The token was once below $100, and it now features a hefty return with an exchange value of $40,000+. It has even been called a store of value in direct comparison to Gold. With the approval of the Spot Bitcoin ETF, it has come in line with Gold in terms of trade.

Mr. Shubham Kadoo and Ms. Khushboo Sodi, researchers published a study titled An Analysis of Cryptocurrency, Bitcoin and the Future, have hailed the rise of Bitcoin on its strength of potentially becoming a viable currency. They have said that most of the surges in the past have come after Bitcoin Halving. That is a process that slices mining rewards and brings down the supply of the token. Thereby, the price is inflated almost instantly after it.

The adoption of BTC could be boosted if countries continue restricting the exchange of currencies. For instance, Argentina has not capped the amount of US dollars that a citizen can exchange. That affects cross-border transactions. A solution is to leverage the potential of crypto and eliminate the intermediary.

Another factor that has previously increased the valuation of Bitcoin is South America’s high inflation rate and large unbanked population. It is estimated that the increase was 5150% between 2014 and 2015.

Needless to say, inflation and the unbanked population continue to be two of the drivers of the rise of Bitcoin.

Bust Cycles: Examining Price Corrections

It has never been all bright for BTC. It recently dropped to $20,000 (and less) in 2022-2023, leaving holders hanging with the decision about the future of their portfolios. However, the token did make a comeback, fueling optimism to the extent that many now hope for the achievement of ATH and then the $100k milestone.

The period between 2014 and 2018 was such that BTC again experienced a free fall. After two years, Halving has saved them.

Bitcoin Halving on July 9, 2016, upticked the price to $2,506 in the next 12 months. The next such experience was on May 11, 2021, when the token moved to $55,847 in response to the halving process, which happened on May 11, 2020.

Factors that bring a gloomy picture to the Bitcoin landscape are market bubbles, regulatory crackdowns, and security breaches, to name a few. Regulatory breaches remain at the center of the stage, with Ripple versus the US SEC under the limelight for more than a year now. A clearer picture of Spot Bitcoin ETF has been shared, and Ether ETF could soon be a reality. But Ripple’s legal battle is taking away the fandom of XRP and its chances to test the floor with an ETF.

Every decline has served as a price correction, then a significant rise. What happens next with Bitcoin could cement this statement.

The Present Landscape: Factors Shaping Bitcoin’s 2024 Trajectory

BTC is listed at $44,517.92 at the time of writing this article. It reflects a rise of 3.75% in the last 24 hours and an increase of 5.38% in the last 7 days. It is poised to surpass the milestone of $65,000 by the end of this year. Factors shaping this trajectory are approval of ETF applications, global recognition, and awareness, among others.

Bullish sentiments

The initial milestone predicted for Bitcoin is $50,000, followed by $65,000, and finally $100,000 in the coming months. These rely significantly on Bitcoin halving, adoption, and growing awareness.

Bitcoin Halving has historically picked up the pace for Bitcoin. The year 2024 may not be different for the ecosystem.

Bearish sentiments

Dark clouds are pouring over concerns around regulations, environmental impact, and competitive cryptos. BTC is not the only token in the segment. Others are picking up their own pace, with ETH as a core contender, followed by many more tokens.

Even though Spot Bitcoin ETF has the green light, many financial advisors remain on the safety edge. They review the product before offering it to their customers for investment and/or trade purposes.

Beyond 2024: A Long-Term Outlook for Bitcoin

A longer outlook for Bitcoin is certainly optimistic, subject to volatility and other economic and geopolitical factors. The bitcoin prediction by CryptoNewsZ estimates that BTC can end 2024 on a high note of $57,500. That would create the possibility for its value to surpass $500,000 by the end of the decade.

Many factors can influence the future, including, but not limited to, BTC losing momentum, governments taking a stance against the crypto sector, and investors withdrawing funds at the peak.

Therefore, staying well-informed and current regarding the cryptocurrency market is advisable. Any alterations, regardless of their nature, impede the progress of the portfolio.

Conclusion

Bitcoin prices are subject to volatility. It changes in minutes, let alone talk about hours or even days. For that matter, prioritize conducting an investigation before investing in BTC or any other cryptocurrency token. Keep an eye on how the appropriate authorities are adopting and regulating it. Nevertheless, avoid abandoning Bitcoin soon. Maintain vigilance while also keeping abreast of the trajectory of the cryptocurrency market.