Cryptocurrency has entered the Bear Market, where the price of Bitcoin, the cryptocurrency with higher market cap had drop down from a hike of $68,000 in November 2021 to present price of $20,000. The value of altcoins have gone through the same fortune as the Bitcoin with various altcoins going down to around 75% from a evergreen hike in around November 2021.
Cryptocurrency skeptics claim about the price of cryptocurrencies would not recover ever. Skeptics are of the view that during each bear market, so it is not a specific concern at such a point. The price of the Bitcoin is going to recover as it has recovered after each bear market. But the much bigger question arises that when would the recovery occur exactly. There are various factors in support of an early end to the present bear market.
For What Reason This Bear Market is Different Than previous Bear Markets
The cryptocurrency skeptics are right in concern to one thing that the particular bear market is a bit different than earlier bear markets for certain reason. Such a bear market is coming most of in global economic recession. This easy fact is concerned with that nobody is yet aware about the fact that how market is going to respond to Bitcoin in recession as Bitcoin was made just after last recession.
With this fact, certain opinions could be made about the market response to Bitcoin during recession. The two options through which market could see at Bitcoin is in both the ways as being a speculative asset with higher risk and higher return or even as store value for inflation.
Bitcoin, A speculative Asset or Store of Value?
There are basically two primary camps in a crypto market having an endless debate on cryptocurrency being speculative asset or a store value. The third camp which makes the argument about Bitcoin being currency, this is not absolutely correct as very few consider it as currency and this is not totally correct as very limited people use the same as currency.
Where the store of value argument is considered having certain merit when in case the value of Bitcoin had gone up. But such an argument had lost value when the value of Bitcoin had totally gone down due to the economy of United States started to lower down in early 2022.
With this, the market tends to treat Bitcoin as no more than a speculative asset. In case the market is seen as, Bitcoin being store of value, then the price must be increased cause the economies around the world started to lower down with the start of 2022. Yes the at that time, value of Bitcoin had drop down faster than the Dollar of United States, this relates with Bitcoin being horrible store of value.
Predictions About Bitcoin Bear Market To An End
There are some different camps which are going to define about the Bitcoin bear market end and yes future is very uncertain, so it’s essential to consider these predictions in concern. Few people are of the thinking that the market is going to end just after the next Bitcoin halving (May 2024) while others claim that it is going to end once the economic recession becomes normal, where smaller minority say that it is going to end if/when the United States Dollar totally drops down. Inorder to take out the best estimate, we should undergo all these predictions so as to make the best estimate.
By May 2024
The earlier Bitcoin bear market has closed in an year of Bitcoin halving. But those who are not aware about Bitcoin halving being preprogrammed part of Bitcoin mining program which minus the reward for a good mining of a Bitcoin block in half. Such halvings happen to come at each 210,000 Bitcoin blocks and this has happened since four years.
The halving tend to create shortage of supply, which increases the price and this tends to provide a stop to Bitcoin bear market.
Furthermore Drop Of Economy
There is no specific reason that Global Economy is losing market, where The United States at present is having larger inflation issues, in addition to supply chain problems. The price value of every aspect is at rise, while salaries are at the same state.
This creating huge amount of issues to an average person, although the one basic reason behind the price of Bitcoin drop down is so severe that most of the individuals had to sell of their holdings so as to recover their expenses.
This is the basic reason behind people discussing that the price of Bitcoin would rise once the economy is going to drop down again or once the recession comes to a stable point. The start of the recession causes various hands to sell of their Bitcoin holdings for ultimately covering their expenses.
This is the basic reason behind people mentioning about the price of the Bitcoin would go up once the economy is going to collapse or when the recession is going to be normal. Most of the Bitcoin holdings were sold off with the start of recession and things are going to get normal once the people with weak hands clear the cryptocurrency market.
US Dollar Collapse
This theory proclaims that US Dollar is on particular path for collapse and that Bitcoin is going to change the same as currency of commerce, when the collapse takes place. Where in 2021 and 2022, Dollar had seen unprecedented inflation, causing few of the countries to consider move away from the use of dollar for commerce. Essentially the oil exporting nations as Saudi Arabia have thought off selling oil in currencies than the United States Dollar.
Is Bitcoin going to be one of those currencies?
Bitcoin tends to reach the price of $60,000 which looked a bit strange when it was launched in 2009. But yes known scene would be of Americans holding their wealth in Bitcoin than in US Dollars. But yes as few individuals local currency has dropped down so most of those individuals have switched their wealth to Bitcoin. For example, Venezuela, Argentina and Iran.
Finally the resultant to Bitcoin Bear Market End could be around the halving in May 2024. But huge price rise could take place before that cause of weak economy and unmanageable inflation of United States dollar. But yes rest assured Bitcoin would ever reach a point Zero.