Founder of Aike Capital, an asset management firm based in New York, Alex Krüger fears Bitcoin might fall as far as $30,000. He claims that the drastic fall is highly feasible. However, this is dependent on the U.S. inflation data to be published on Wednesday exceeding way above the forecasted value.
Many investors anticipate the widely-monitored Consumer Price Index (CPI) to increase up to 7.1% for this present year. A monthly increase of 0.4% is also expected from the CPI. This increase shows why the U.S. Federal Reserve officers more than ever before are rooting for rapid regularization of their monetary policy.
According to data published on the 7th of January, the normalizing labor markets, as well as decrease in unemployment claims and increase in income, has further supported the U.S. Federal Reserve preparation.
Krüger via a tweet on Sunday affirmed that cryptocurrencies are at the far end of the danger curve. He added that since crypto assets had profited from the Fed’s “extraordinarily lenient monetary policy,” it’s only logical they suffer from the sudden stringent policy.
In his words, Krüger believes Bitcoin to be a macro asset that has been trading as a broker for liquidity situations. And with a decrease in liquidity, whales in the market, presently in the battle, are bound to sell Bitcoin causing altcoins to follow the downtrend. It has also affected oil price as Oil Profit allows trading bitcoin for oil in their platform.
The first interest rate hike in March 2022?
The U.S. Federal Reserve has been purchasing $40 billion worth of mortgage-backed securities and $80 billion worth of government bonds each month since the beginning of March 2020. On the other hand, the U.S. central bank has maintained its standard interest rates to near zero, hence, making lending to businesses and individuals cheaper.
However, the collateral harm of such a flexible monetary policy is increased inflation which maxed at 6.8% in November 2021. This interest rate recorded has been the highest witnessed in the last 40 years. Presently, the U.S. Federal Reserve that once argued that the CPI is transitory has now changed its position. The Fed has switched positions from anticipating zero rate hikes in 2022 to reviewing different hikes while normalizing their balance sheet regularization.
The chief investment officer of BNY Mellon Wealth Management, LeoGrohowski affirmed that the recent actions from the Fed are not as dramatic as expected. He admitted that Fed’s switch to a further hawkish position has been nothing but a surprise.
He continued saying that most participants in the market were expecting less generous monetary policy and higher rates but that was not the case. The Fed implied a 90% possibility of a hike around March which is way higher than the 63% charged a day to the new year.
Mini bear market?
The senior commodity strategist at Bloomberg Intelligence, Mike McGlone, claimed $40,000 is a vital support mark for Bitcoin. He believes that the crypto sphere will eventually see the end of this present bearish trend. He also anticipates a time where more people treat Bitcoin as collateral as the world becomes more digitalized.
The Fed minute was published as Bitcoin saw a decline from its all-time high record of $69,000 attained on November 8, 2021. And since then, Bitcoin has experienced a fall of more than 40%. According to the chief executive officer at Blockforce Capital, Eric Ervin, this drastic drop has scared off recent investors leaving the market just for long-term holders and investors.
Eric asserts that the current bearish trend could be a “mini bear market”. He added that these corrections are totally normal in the crypto sphere and many investors are getting ready to go bullish soon.
Krüger also remarked that Bitcoin is already at an oversold position given its drastic drop from its all-time high. Therefore, if the CPI reason makes a surprise, the crypto market could see Bitcoin price surge and pop for some time.
Krüger believes that the price of Bitcoin should range between $41,000 and $44,000. Until then, the direction of the market cannot be fully determined. Time will definitely tell.
Please note that the opinions and views expressed by these experts are not financial advice but their honest assessment of the market. They could be right or wrong as the market is highly volatile. Crypto trading involves significant risks so ensure you do your research before investing.
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A reasonable assumption that Bitcoin could hypothetically reach the null state of it's value is worth the thought. Even-though such an event is very less likely to take place, there are some factors that could theoretically lead to Bitcoin price crashing to zero.
Bitcoin, it found, is likely to hit an average peak price of $87,875 in 2024, with some experts predicting it will climb as high as $200,000. On the flip side, the average lowest price Bitcoin could hit by the end of 2024, is seen as $35,734, the report said, with some predicting it will fall as low as $20,000.
Bitcoin took a sharp tumble on Saturday amid a frightening uptick in geopolitical tensions. Following news that Iran's fundamentalist rulers had launched a massive air attack on Israel, the price fell from around $70,000 to $62,000—a more than 10% drop—while some altcoins plunged 15% or more.
A flash crash is a phenomenon where an asset at least briefly trades far below its typical market price, often as a result of automated trading strategies and mismatches in liquidity or a very unequal ratio of buyers to sellers.
A $100 investment in Bitcoin could purchase 0.00607 BTC today based on a price of $16,466.14 at the time of writing. If Bitcoin hits the $1 million price target by Wood in 2030, the $100 investment would turn into $6,070. This represents a gain of 5,970% from now until 2030.
If bitcoin experiences that same rate of appreciation in its average annual returns, it will reach $98,700 in January 2025 and hit $100,000 in February of that same year. Some experts believe bitcoin could increase in value even more quickly.
If Bitcoin continues this pattern into 2030, the price could peak around 2029 or 2030. If Wood is correct and Bitcoin reaches $3.8 million, if you invested $1,000 in Bitcoin now, it would be worth $54,280 in 2030. This would result in a compounded annual growth rate (CAGR) of nearly 95%.
Who Owns the Most Bitcoins? Satoshi Nakamoto, the pseudonymous creator of Bitcoin, is believed to own the most bitcoins, with estimates suggesting over 1 million BTC mined in the early days of the network.
All in all (and Black Swan events aside), 2024 is shaping up to be more of the same for crypto asset prices. My base case scenario is that the market will bottom out and begin recovering more meaningfully by Q4 2024.
Unfortunately, it's also incredibly volatile. For that reason, while current market conditions are favorable for anyone considering buying Bitcoin, it is an asset you should purchase only at your own risk. Because while Bitcoin may have the potential for significant returns, you may also lose most of your investment.
Bitcoins are still only accepted by a very small group of online merchants. This makes it unfeasible to completely rely on Bitcoins as a currency. There is also a possibility that governments might force merchants to not use Bitcoins to ensure that users' transactions can be tracked.
Cryptojacking is a form of malware that hides on your device and steals its computing resources in order to mine for valuable online currencies like Bitcoin.
The crypto market has maintained its bullish momentum in 2024 after Ethereum rallied 85% and bitcoin gained nearly 150% in 2023. Heading into April, bitcoin prices are up another 64.9% year-to-date, while Ethereum prices are up 55.6%.
It is theoretically possible. Bitcoin has been around for close to 15 years now, and although it has survived several dramatic crashes before making new highs, its extreme volatile nature puts investors at risk of losing all their money.
The value of Bitcoin can be volatile, and it can go up and down over time. If the price of Bitcoin goes back up after it has dropped to 0, the value of your investment would increase again. However, it's important to note that investing in Bitcoin carries risks, and there are no guarantees of future returns.
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