Bitcoin (BTC) - Price prediction 2023 – 2025
- 5 minute read
The past few weeks have not been easy for Bitcoin HODLers. While some were already reckoning with the possible start of a new Bull market, the actual results were far less spectacular. FTX ran into solvency problems and went bankrupt. All sorts of related parties collapsed and there were even rumours of Genesis' insolvency. Some dared not open their portfolios while others rejoiced at the dip and bought coins at a discount. With Bitcoin (at the time of writing) dancing around the 16k mark, there is one question on everyone's mind: what else can we expect from Bitcoin in 2023, 2024 and 2025?
Table of Contents
- What is Bitcoin?
- Bitcoin Price History
- Bitcoin, what to expect in 2023?
- JPMorgan & Bitcoin
- Bitcoin price expectations 2023, 2024 and 2025
What is Bitcoin?
OK, this question seems a bit redundant, but let's give a brief overview for those who are just getting started with crypto. Bitcoin is a decentralised (digital) currency created in 2009 by Satoshi Nakamoto. This new financial ecosystem is maintained and distributed through the so-called blockchain, a decentralised database. Simply put, Bitcoin is a peer-to-peer electronic money system (Satoshi's own words). Because it is decentralised, there is no bank or other third party behind the scenes. All transactions are verified and secured by the people running the network on their devices, making the payment system instant and borderless. A financial ecosystem by the people, for the people.
We could go on and on about Bitcoin, but we just wanted to paint a picture to set the tone for this article. As for Bitcoin, the main conclusions are:
- Bitcoin is the first crypto-currency and is also the largest in terms of market capitalisation;
- Bitcoin's all-time-high was $69,044 on 10 November 2021;
- Cryptocurrencies (and hence Bitcoin) are known for their volatility and go through multiple cycles of 'boom and bust';
- Bitcoin is also known for its use of the blockchain, a decentralised distributed database (ledger) that runs on a network of devices (computers).
Bitcoin came into the spotlight because of its constant price movements. Bitcoin's price has been on a rollercoaster for years. A currency rising from $1 in 2011 to 69K in November 2021 does get some attention in the long run. Although Bitcoin is not tangible, it is valued so high because of supply and demand, production costs and scarcity. As of November 2021, Bitcoin had a total market capitalisation of $1.11 trillion, a staggering figure when you consider that Bitcoin is still in the early stages of technology and implementation.
Bitcoin Price History
Bitcoin price is the most discussed topic in the crypto world. People who know nothing about cryptocurrency are constantly confronted with headlines like: Bitcoin reaches new all-time high, as well as headlines like: Bitcoin price crashes;. This extreme volatility makes Bitcoin a popular topic of conversation. But did you know that Bitcoin had not gone above $25 until 2013 (two years after its creation)? That same year, Bitcoin reached a price of $1000. From $25 to $1000 in the span of just one year. A solid market development had never been seen before and it didn't take long for the snowball effect to begin. Buying Bitcoin became a lot easier (Anycoin Direct was founded in 2013) and media coverage began to follow.
The breakthrough year for BTC was 2013 when the price soared from $13 to $1,200. Word of mouth did its job and the number of brokers and wallet providers skyrocketed. Bitcoin became popular among nerds and early investors. The year that followed was important for Bitcoin, as Bitcoin experienced its first major crash. The bankruptcy of Mt.Gox caused Bitcoin to fall from $1241 to $91. Its extreme volatile fluctuations would later become a well-known aspect of the crypto market. Terms like 'HODL' were created. It would not be the last crash for Bitcoin.
It started getting huge in 2017, when a huge influx of buyers, institutional money and media, transformed Bitcoin from a nerdy niche hobby to a financial phenomenon. The price went from $707 to almost $17K. Crypto brokers and exchanges could not handle the traffic and all-time high after all-time high followed one another. This is the year Bitcoin went mainstream. But as in 2013, it flew to a high too fast. From its highest point in 2017 to its lowest point in 2018, BTC dropped from 16K to around 3K. Once again, these cycles of boom and busts began to define cryptocurrency and became an important aspect for people's investment strategy Bitcoin over the years:
- BTC price 2011: Lowest - €0.3 / Highest - €31.9
- BTC price 2012: Lowest - € 3.9 / Highest - € 15.4
- BTC price 2013: Lowest - € 13.2 / Highest - € 1,241
- BTC price 2014: Lowest - € 91.7 / Highest - € 1,093
- BTC price 2015: Lowest - € 135.85 / Highest - € 426.79
- BTC price 2016: Lowest - € 314.69 / Highest - € 937.90
- BTC price 2017: Lowest - € 707.06 / Highest - € 16,727
- BTC price 2018: Lowest - € 2,775 / Highest - € 15,249
- BTC price 2019: Lowest - € 2,928 / Highest - € 12,223
- BTC price 2020: Lowest - € 5,409 / Highest - € 23,445
- BTC price 2021: Lowest - € 23,758 / Highest - € 59,716
- BTC price 2022: Lowest - €15,300 / Highest - €42,039
Bitcoin, what to expect in 2023?
Unfortunately, there are no upgrades or developments planned for Bitcoin in 2023. Bitcoin is not run like Ethereum or Cardano, where a corporate-like board sets the roadmap and where updates are the order of the day. This makes Bitcoin decentralised, but also slower in terms of upgrades and deployments. Therefore, we should look at what experts say and focus on the economic expectations for 2023 and the updates or changes already planned.
Global inflation and rising interest rates
Bitcoin has fallen sharply and PlanB's model has been downgraded to PlanC. Celsius, Voyager, Three Arrows Capital (3AC) and FTX did not survive the bear market and the outlook for Bitcoin is not very positive. To put it mildly, economic developments are not very promising. Inflation in America was 8.2% in October and Europe averaged 10.7%. In the Netherlands, inflation was as high as 14.5% in September. Rising inflation is being tried to quell by increased interest rates - in both America and Europe, interest rates have risen sharply. In November 2022, the Fed in America decided to raise interest rates by 75 percentage points from 3.25% to 4% and in Europe, the ECB raised rates to 2%. Although these are significant increases compared to recent years, critics say it is still far too low to reduce current inflation.
In general, interest rates affect investments. On stocks, bonds and precious metals as well as on housing prices and cryptocurrencies. With lower interest rates, companies and consumers are able to borrow at lower interest rates. There will generally be lower costs with lower interest rates. Consumers will have lower costs with mortgages or car loans, for example, and the government will have fewer interest payments to make and more money left over to spend on other things. Companies will then make less profit because consumers will have less to spend and themselves have higher costs on loans. Higher interest rates therefore tend to have a negative effect on asset valuations, although this is not always true.
That higher interest rates have had an impact on the prices of cryptocurrencies and equities is clearly reflected in the prices. Both asset classes have generally fallen a lot. The share price of the Nasdaq-100 - the largest 100 technology companies in America - has fallen about 30% since the beginning of the year. The entire cryptocurrency market has fallen from a high in market capitalisation of 3 trillion to a low of 830 billion; a drop of about 70%. Many believe Bitcoin can only start rising again once the economic troubles are behind us, inflation has fallen, and interest rates can be lowered again so that risky assets are in demand again.
Interest rates depend largely on inflation. The higher inflation is, the more central banks will adopt tighter money policies to reduce inflation. Since interest rates thus have a major impact on the value of Bitcoin, interest rate expectations are always very important for the Bitcoin community. Along with the Fed's interest rate decision, an interest rate forecast is also indicated. Interest rates are expected to rise to 4.4% by the end of 2022 and 4.6% by the end of 2023. So interest rates will remain significantly higher than they have been for some time. A new rise in Bitcoin's share price could be a while away as a result.
One of the most important topics for Bitcoin are the halving cycles of the Bitcoin network. The halving happens every four years. This halving cycle ensures that fewer coins are issued when mining Bitcoin, so that the supply is fixed (21 million BTC). This is in contrast to Fiat currencies, where the money supply is anything but fixed. The last Bitcoin halving was on 11 May 2020. Then the reward per block fell from 12.5 BTC to 6.25 BTC. A block is mined approximately every 10 min, although this can vary somewhat.
The halving is a programmed reduction of new supply due to block mining. Block rewards have been higher in Bitcoin's early years. This was done to encourage miners to start validating blocks (and thus transactions). The idea behind an ever decreasing block reward is that the bitcoin network should, in the long run, be self-sustaining based on the transaction fees paid by users.
It is generally assumed that halving has an impact on the price of bitcoin. This is logical to assume, as less Bitcoin is entering the market. This lowers selling pressure. The first halving took place in November 2012. The price then stood at around $11. A year later, the price was about 100x higher, around $1100. In July 2016, when a total of 420,000 blocks were mined, the second halving became a reality. Bitcoin's price fluctuated between $500 and $1000 dollars for several months, before finally reaching a temporary top of $20,000 in 2017. The third halving took place in May 2020. The price then rose from around $9000 to $69,000.
The next halving will take place around May 4, 2024. Many argue that this will again have a major impact on the price of Bitcoin, as there will be less Bitcoin in circulation. Although historically this has always caused 'cycles' in the price of Bitcoin and logically affects the supply and demand ratio, there is no guarantee of a higher Bitcoin price after the halving. It should also be added that the influence of the halving is getting smaller and smaller, as the number of Bitcoin coming into circulation through block rewards is decreasing.
Bitcoin price prediction
The collapse and successive bankruptcy of FTX has had a negative impact on the price of Bitcoin and other cryptocurrencies. In addition, rumours circulated that related parties such as Crypto.com and even Genesis were having problems. With this, the bear market seems to be in its nadir. Some say these cycles are necessary in a free market to maintain efficiency and good productivity. Market participants are not bought out by the government to avoid bankruptcy and will cease to exist. This market cleansing also removes leverage (the use of borrowed money) from the system, as it has done before in the crypto market. But it is not only in the crypto market that this kind of market cleansing takes place. Consider, for example, the internet bubble (dot-com bubble) in which from 1997 to 2000 the prices of shares of internet companies gained huge valuations. In 2000, this bubble burst and share prices collapsed. Eventually, companies that existed like Google and Amazon survived and are now worth a lot of money. Whether this cleansing is now complete in the crypto market and the ground has been set for a new way up is a question that is difficult to answer.
In our previous Bitcoin price prediction, we also highlighted conservative predictions. For example, that of Will Harborne, the CEO of decentralised exchange DeversiFi. "We are in a bubble," Harborne said. "There have been multiple bubbles through the history of cryptocurrency, and that's not necessarily a bad thing, that's because real value is being created and people are speculating on it and everyone is getting too far ahead of themselves." This bubble now seems to have (partially) burst. However, the CEO does not want to attach a prediction to his quote, stating that anyone who tries to predict the market is wrong.
Despite the news in recent weeks, billionaire Tim Draper is still extremely positive about Bitcoin. Despite the FTX fiasco, Draper says: "No change in my price expectation. I still expect Bitcoin to reach $250,000 early next year'. The fall of central parties would only make DeFi attract more participants. But a price of $250,000 would mean Bitcoin still needs to rise by a factor of about 15. This seems somewhat ambitious given the price trend in recent weeks. Although Tim Draper has made accurate price analyses on Bitcoin in the past such as the $20,000 price in 2020.
Many people ran ahead of PlanB's 98K prediction and his Stock-to-flow model for Bitcoin has received a lot of criticism. Yet PlanB has recentlyMik spoken out again on twitter and remains positive about future price trends. The demise of FTX is, according to PlanB, only a minor issue. 'The number of Bitcoin currently at profit is about 55%. This will start rising again'.
JPMorgan & Bitcoin
JPMorgan Chase & Co is the largest bank in the United States. CEO Jamie Dimon has been very critical of Bitcoin in the past, but lately it seems that the multinational investment bank is slowly changing its opinion. Although JPMorgan is still conservative, it has issued a notice saying that Bitcoin is currently undervalued. JPMorgan estimates that the realistic value of one Bitcoin is $38,000. They also registered a trademark for their own wallets on 21 November 2022. This would allow them to ship, trade, process payments and offer accounts of virtual currency from now on. This could have an extremely positive effect on the price of Bitcoin and other cryptocurrencies in the long run.
Clearly, there are multiple prospects for Bitcoin. Opinions are divided. In general, a negative sentiment prevails now that several central parties have recently collapsed within the crypto domain. Nevertheless, developments around Bitcoin will continue. Further developments of the Lightning network and real-life use cases will play an integral role when it comes to rapid adoption outside the crypto scene. When in doubt, zoom out.
Bitcoin price expectations 2023, 2024 and 2025
Specific predictions so many years ahead are impossible and, as mentioned earlier, should be taken with a grain of salt. Nevertheless, professional forecasting agencies and experts try to calculate a price based on algorithms and technical analysis. Taking the average into account, we can give an estimate based on what experts have to say. Thus, on average, they predict the following prices:
Always trade with caution. These prices are averages but can change depending on the bull or bear cycles. An example of this is the 2024 Bitcoin Halving. The 2024 Bitcoin halving will have great impact on the price, but chances are big that a sell-off is inevitable once the halving has been completed. These are averages and a lot can happen in a short period of time. Always keep your eyes on the latest developments to make sure that you are well prepared.
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