Bitcoin (BTC) Price Prediction: New Highs Possible, But So Are the Odds of Another Implosive Correction

Bitcoin, Ethereum, and cryptos are exciting assets, but their volatility means that discipline is critical for success. Only invest what you are willing to lose because the potential for substantial profits comes with the risk of commensurate losses.

Bitcoin price analysis: Crypto booms and busts continue into H2 2024

Bitcoin price action hit a record high in March and was poised for new peaks in Q3 2024

After a 70% decline in Q2 2023, Bitcoin (BTC) enjoyed a strong first half of 2024. Prices rose, reaching record highs in the first quarter, before falling significantly in the second quarter. However, optimism returned in the third quarter as the Federal Reserve stopped raising interest rates and there were signs that inflation had peaked.

Cryptocurrency price chart shows an increase from 5 cents to $73,662 over the past 14 years. There have been large fluctuations in prices during this time, but the long-term trend continues to be upward.

Currently, Bitcoin is trading at his $66,000 and its future direction is unknown. However, several cases can be considered based on past patterns and current market conditions.

Case where Bitcoin price may rise

Bitcoin, the leading token of cryptocurrencies, has evolved from an obscure alternative asset to an alternative currency and store of value. Futures, ETFs, and celebrity support increase addressable markets and liquidity. The case in favor of higher highs is shown below.

Bitcoin has a market valuation of over $1.3 trillion, but it is still a smaller asset than major stocks.

The top 6 companies by market valuation are bigger than the currency and asset Bitcoin.

As a liquid alternative investment vehicle, institutional investors are adopting Bitcoin in their capital allocation. Central banks, financial authorities, and governments are aware of the leading cryptos and their more liquid cousins, making them important elements in the global financial system.

Case where Bitcoin price may fall

Bitcoin's profile has risen, but there are many influential voices who continue to reject its intrinsic value and future. Warren Buffett, one of the world's most respected value investors, has called Bitcoin and cryptocurrencies "his square of financial rat venom." In 2018, he said all over the world he would not pay $25 for Bitcoin. There is no indication that he has changed his mind. The case for Bitcoin and crypto is shown below.

Volatility creates a paradise of opportunity, but a nightmare for passive investors. The threat of government intervention or bans is a major hurdle for Bitcoin and the cryptocurrency asset class.

Conclusion: Odds favor new highs, but the rally could lead to another significant decline

Bitcoin is worth $1.3 trillion and all cryptos at current price is around $2.4 trillion, but the asset class is still small compared to stocks, bonds, commodities, and fiat currencies. Current size offers a variety of benefits. On the one hand, there is considerable room for growth, and on the other hand, the higher the market valuation, the more likely government and legislative measures will protect the control of the money supply. Therefore, price spikes and crashes are expected to continue.

Current upside target is $100,000 and market valuation is $3-4 trillion. Currently, the company with the leading market valuation is Apple, valued at approximately $3.5 trillion. If Bitcoin or the asset class exceeds this level, we would expect government forces to act in concert to slow the rally and create another period of decline.

When investing capital in Bitcoin and crypto, make sure you can afford to lose it. Remember, the potential for over-reward always comes with commensurate risk.

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