Bitcoin: Between Price Risks and Long-term Potential

In a year when Bitcoin (CRYPTO: BTC) has risen by 50%, the last six months have unfolded differently than expected for investors. Following the Bitcoin halving in April, the price was supposed to skyrocket, but it remained nearly unchanged at its current level of $63,000. This presents investors with a decision: should one invest in Bitcoin now and hope for a price surge, or rather look for other high-risk but promising investments? Those considering Bitcoin investment now should temper their expectations for the rest of the year. Forecasts from the crypto market suggest that Bitcoin has about a 57% chance of reaching a new high in 2024—a coin toss as to whether the previous peak of $73,750 will be surpassed by the year's end. Meanwhile, the chances of Bitcoin surpassing the $100,000 mark this year are only 14%. However, the long-term outlook is more optimistic. Investment firm Bernstein expects Bitcoin to potentially reach $200,000 by the end of 2025. Investors like Cathie Wood of Ark Invest even anticipate a rise to $1 million by 2030. Michael Saylor of MicroStrategy goes even further, predicting a Bitcoin price of $13 million by 2045. For short-term oriented investors, Bitcoin may not be the best choice. In this case, a tech stock like Nvidia (NASDAQ: NVDA), which has already risen by 159% this year, might be more attractive. However, long-term investors could make a good catch with Bitcoin, particularly because of its potential to revolutionize the global financial system through blockchain technology. Wood uses the term "financial superhighway" to describe this potential. Nonetheless, even with such ambitious predictions, one should remain skeptical. The groundbreaking change that Bitcoin promises is still awaited after more than a decade of discussion. However, this year, the political climate for Bitcoin has changed, especially in the United States, where voices are emerging wanting to position the country as a "Bitcoin superpower." Senator Cynthia Lummis's legislative initiative to create a national strategic Bitcoin reserve may seem unusual, but it speaks to Bitcoin's long-term growth fantasies. With a current price of $63,000, the question arises: could Bitcoin experience another rapid increase in the coming decade? For investors ready to accept the risk and volatility of the crypto market, now might be an opportune time to incorporate Bitcoin into their portfolio.