Despite the Crypto Crash, Optimism Surrounds Bitcoin
For Bitcoin investors, the latest cause for concern came in late August, when Tesla — which in December 2020 invested $1.5 billion in that particular cryptocurrency — announced it was selling off 75 percent of its BTC holdings.
Granted, it was accompanied by a statement from company CEO Elon Musk that Tesla is “open to increasing Bitcoin Holdings in future.” Still, it raises one more red flag, among many: The richest man in the world is bailing? What gives?
At just about the same time, Bloomberg posted a piece to its website entitled “Bitcoin’s Crypto Winter Morphs Into a Sleepy Summer,” in which the writer, Michael P. Regan, deduced that there are two possible conclusions that can be drawn from the fact that Bitcoin’s value had settled right around the $20,000 mark, after plummeting from an all-time high of $69,000 in November 2021 to under $20,000 in June 2022. It is either a sign that “the bleeding has stopped,” Regan wrote, or “a rest stop for Bitcoin on the road to irrelevance.”
Certainly there is no shortage of BTC naysayers at this point. One expert called it “a risky asset.” Another viewed it as being “super volatile,” and a piece in the Financial Times Financial Times called it “the most speculative asset on the planet, possibly even the most speculative of all time.”
At the same time there are those who continue to be bullish on Bitcoin. Some analysts predict its value will reach $32,000 by the end of 2022, and that it could be as great as $100,000 by the end of 2030. Even more optimistic are the projections of those who foresee the partnership between the asset manager BlackRock and the crypto exchange CoinBase greatly impacting the sector. They envision BTC’s value reaching $773,000 in the long term.
Also, consider that while it has been banned in China, El Salvador and the Central African Republic have adopted Bitcoin as legal tender. And though it is best to adopt a wait-and-see attitude about a 2018 prediction on the part of Square CEO Jack Dorsey, the former Twitter head, that BTC will become the world’s sole currency no later than 2028, certainly it is worth noting its impact on small businesses. Three of every 10 in the United Arab Emirates, Hong Kong, Singapore and Brazil accept it as payment, as do 19 percent in the U.S.
Another hopeful sign for those in the sector is the fact that major banks like Barclays and Citigroup have invested in Bitcoin. There is also some expectation that a BTC ETF will emerge at some point in the near future.
In short, things are not as bleak as they might seem. Kiana Danial, founder of Invest Diva, was quoted on the website NextAdvisor as saying that she expects “volatility (in the) short term and growth (in the) long term” when it comes to Bitcoin, and she was echoed by veteran trader Tone Hays, who told the website The Daily Hodl that BTC’s “bullish structure” makes him “65 percent confident” that better things lie ahead for the crypto.
This is not to say that there have not been some concerning trends in recent months with Bitcoin. What it is to say is that it is not all gloom and doom. Experts recommend a reasoned approach to crypto in general, to go in with eyes wide open. On that score, nothing has changed. It’s always best to proceed with caution, and that is more true now than ever.