A tweet from Elon Musk can make or break a bitcoin investor’s day. The announcement that Tesla would start accepting bitcoins and that the company had also invested an additional $ 1.5 billion in the cryptocurrency caused the price to rise to a record high of $ 48,000 in early February.
The price of bitcoin is, partly thanks to Musk, quite volatile and that scares many investors. They wonder if there isn’t a bubble.
Yet others are optimistic about the value development of not only bitcoin, but also other cryptocurrencies such as ethereum.
“Cryptos are becoming mainstream,” says Flemish trend watcher Tom Palmaerts in a recent report commissioned by trading platform LiteBit. He deduces this from the fact that more and more renowned companies in the financial sector are taking cryptocurrency’s like bitcoin and ethereum seriously. Crypto price prediction is popular.
For example, Americans have been able to buy and sell crypto coins with PayPal since the beginning of this year. Mastercard like VISA also want to make it possible to pay with cryptos and J.P. Morgan, one of the largest banks in the United States, is even going to develop its own blockchain technology-based “coin”.
“Especially a coin from a bank like J.P. Morgan will further strengthen confidence in crypto, because it also enables international payments, ”says Palmaerts.
The rise of stablecoins has more favorable effects for the entire crypto market, the trend watcher expects. For example, they can attract investors who are cautious about the volatile, mainstream cryptos. Stablecoins can also build a bridge between cryptocurrencies and traditional financial markets.
New rich
This does not mean that the prices of crypto currencies such as bitcoin and ethereum will be less volatile in the near future. That may deter conservative investors, but the younger generation, “Generation Z”, certainly not. Best cryptocurrency website France is popular.
Palmaerts expects that those who cleverly respond to market developments can still earn quite a lot in the coming years. “In five years’ time, many successful crypto investors who cleverly handle volatility will be among the new rich.”
Palmaerts expects the trend line to continue to go up. “By 2025, bitcoin is predicted to be worth more than a million dollars, based on the evolutions we have now seen, and Ethereum may even be more.”
How did Palmaerts arrive at this statement? “We see cycles of about four years in which the crypto coins evolve. This is mainly due to the halving of the most popular cryptocurrency bitcoin, whereby the reward for miners who approve the transactions is halved. The year following this halving is usually a peak year for crypto investors. We saw this in 2017 (after the halving of 2016) and we also saw this after the halving of 2020, ”says Palmaerts.
A halving, or halving in good Dutch, means that mining the crypto currency will become less lucrative, so that there will be less supply while the demand for bitcoin is expected to remain high.
Safety
But, what about the reliability of bitcoin providers and trading platforms? A high rate is nice, but if you cannot then sell your bitcoins or ethereums or even cannot access them at all, it will be of little use to you. Everyone in their environment hears about lost bitcoin fortunes, true or not.
Olivier Van Duijn, CEO of LiteBit: “We also realize that a lot of education is still needed for the general public. Stories about hacks and fraud inspire fear, while these kinds of phenomena are of course inherent to extensive digitization. To tackle this, we believe it is important to stand out from the crowd and support our customers with educational content and a secure platform for their crypto transactions. That safety really comes first. We regularly subject our platform to rigorous tests and continuously invest in the latest safety technology. ”
In order to give potential investors in cryptocurrency’s even more certainty, LiteBit, which has been officially registered with De Nederlandsche Bank since November 2020, requires clear regulations.
Van Duijn: “We are in favor of clear regulations. It can also be quite demanding. This will ensure a further professionalization of our sector. At LiteBit, compliance comes first and we even try to stay ahead of the regulations. This is how we gain the trust of our customers. ”