Will crypto bounce back in 2023

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Bitcoin had a rocky first half of the year, but experts still say it will eventually hit $100,000 — and that it’s more a matter of when, not if.

Despite the volatility and recent slumping price, many experts still say bitcoin is on its way to passing the $100,000 mark, though with varying opinions on exactly when that will happen. And a recent study by Deutsche Bank found that about a quarter of bitcoin investors believe bitcoin prices will be over $110,000 in five years.

The volatility is nothing new, and is a big reason experts say new crypto investors should be extremely cautious when allocating part of their portfolio to cryptocurrency. bitcoin has shown as steady a rise in value over the years as any other cryptocurrency on the market. 

It’s only reasonable for bitcoin investors to be curious about how high it can ultimately go. 

What Is Currently Causing Bitcoin’s Price Movement?

Once one of the rising stars of the crypto world, major crypto exchange FTX has filed for bankruptcy. Evidently, that’s had major ramifications on the crypto market, and the fallout isn’t over yet.

Genesis Global Trading, the lending arm of crypto platform Gemini, has paused new loan originations and redemptions in the wake of FTX’s collapse; BlockFi, a major crypto exchange and lender, is preparing for its own potential bankruptcy, according to the Wall Street Journal; And now, worries have mounted over the solvency of Grayscale Bitcoin Trust (GBTC), one of the world’s largest bitcoin funds.

All of this commotion has made for a rocky end of the year for the cryptocurrency market. Bitcoin’s price plummeted under $16,000 again Monday afternoon, nearing another two-year low. The crash comes after a solid month of low but steady prices for both bitcoin and ethereum.

Aside from the current crash, bitcoin’s shortcomings stem from a string of bad economic news over the last couple of months, which has been turning market sentiment to the downside. The continuing war in Ukraine, shifting monetary US policy, inflation and U.S. dollar strength have kept the crypto market in a slump. Bitcoin is down more than 70% in value from its all-time high in November 2021.

“Cryptos are weakening as risk appetite just left the building,” Edward Moya, a senior market analyst at Oanda, wrote on Market Pulse. ”We will be talking a lot about FTX for months to come but what will drive the cryptos is if Binance, Coinbase, Lbank, or Consbit have any liquidity crunches. A lot of bad news has been priced in so it might take another downfall of a major crypto company or a de-risking movement on Wall Street to take bitcoin below its recent low. “

Bitcoin has only been above $45,000 for a few short stretches over the past six months and hasn’t been above $50,000 since Dec. 25, 2021. Amid the ups and downs, bitcoin’s current price is a long way off from the latest all-time high it hit in November 2021 when it went over $68,000. But even with the recent decline in price, bitcoin is still more than twice as valuable as it was just a couple of years ago. For bitcoin, these kinds of ups and downs are nothing new.

Prices updated: November 27, 2022

Bitcoin Price Predictions for 2022: Between $10,000 and $28,000

Bitcoin’s price is extremely difficult to predict and even more susceptible to market factors than more established asset classes. But we decided to ask some experts for their best guesses for 2022 anyway. 

It’s been a brutal first half of 2022 for crypto, as well as the stock market. Investors have turned away from risky assets in a time of a slowing economy, higher inflation, and rising interest rates. Given that Wall Street is in a bear market and experts expect it to last for a few more months, bitcoin could make its way back up to $28,000 by the end of the year, according to an analysis from Deutsche Bank. Meanwhile, a 53-expert panel reported by Finder expects bitcoin’s price to reach at least $25,000 by the end of 2022.

But one expert isn’t convinced bitcoin has hit its lowest price of this year yet. Crypto market analyst Wendy O expects bitcoin to drop as low as $10,000 since it has a history of correcting as much as 85% in past bear markets. The largest crypto hit an all-time high in November 2021 at roughly $68,000, so an 85% correction would lead it to around $10,000, says O. 

However, it’s not going to be a straight shot down. According to O’s technical analysis, bitcoin has several resistance levels, so we’ll likely see a volatile reversal upward before bitcoin completely bottoms out this year.

Pro Tip

No matter what the experts predict for bitcoin’s price, stay focused building on your overall portfolio including passive index funds, emergency savings, and your retirement account(s).

Bitcoin Price Prediction for 2023: Between $38,000 and $100,000

It was easy to predict a $100,000 bitcoin price late last year, coming off its latest all-time high in November. With bitcoin’s big fall since then, the prediction game is even trickier.

“The most knowledgeable educators in the space are predicting $100,000 bitcoin in Q1 2022 or sooner,” Kate Waltman, a New York-based certified public accountant who specializes in crypto, told us back in November 2021.

But now, experts anticipate bitcoin to end up far away from the $100,000 mark in 2023. It’s more realistic for bitcoin to be in the $40,000 to $50,000 range in the next year, says Jurrien Timmer, director of global macro at Fidelity Investments. 

“I have a sense of what bitcoin is worth and what it’s worth in the future,” he says. “If the demand model says that bitcoin’s intrinsic value is $50,000 today and $100,000 two years from now (my thesis), then at $30,000 bitcoin is going to look a lot better than at $70,000.”

Crypto investors expect bitcoin to bounce back to around $38,000 by the start of 2023, according to a survey of roughly 4,400 Americans by intelligence company Morning Consult. Chris Brendler, senior research analyst at D.A. Davidson, has a similar view, predicting bitcoin will be worth at least $38,000 by the end of this year and $50,000 by the end of 2023. 

Bitcoin Price Prediction for 2025: As High As $100,000

Crypto experts say bitcoin can still climb to $100,000 or more like many experts predicted late last year — just on a slower timeline. 

“What I expect from bitcoin is volatility [in the] short-term and growth [in the] long-term,” says Kiana Danial, founder of Invest Diva and author of “Cryptocurrency Investing For Dummies.”

Investors should expect a “pretty sustainable” rise in bitcoin’s long-term value driven by organic market movement, with the $100,000 threshold by 2025, according to Timmer. “I remain bullish on bitcoin as an aspiring store of value in a world of ongoing financial repression,” he says. 

Bloomberg commodity strategist Mike McGlone expects the price of bitcoin could still hit $100,000 by 2025 once the bear market subsides and crypto prices recover again. A panel made up of more than 50 crypto experts by Finder also expects bitcoin to reach at least $100,000 by 2025. 

“It’s just a question of time. That’s purely measuring, supply by code is going down, demand and adoption are going up,” McGlone said during an interview with Kitco News in June. 

Bitcoin Price Prediction for 2030: From $150,000 to $12.5 Million

Many experts are hesitant to predict a number and a date, especially a full eight years into the future, but rather point to the trend of bitcoin increasing its value over time. 

Robert Breedlove, founder and CEO of digital assets marketing and consulting firm Parallax Digital, predicts bitcoin will be valued at $12.5 million by 2030 because inflationary pressures will drive interest in cryptocurrency, pushing the value of bitcoin up higher than previous projections estimated. Known as more of a philosopher type among crypto enthusiasts, Breedlove speaks often about the broader social implications of crypto as a form of more transparent, decentralized currency — but his price predictions haven’t exactly been spot-on. 

Ian Balina, founder of crypto research and media company Token Metrics, anticipates bitcoin can go up to $150,000, but the timeline is unclear. Balina says the release of new altcoins and hype about the metaverse will continue to drive the demand for crypto, and bitcoin will therefore bounce back eventually.

Big financial institutions have made their own predictions, as well, with JPMorgan predicting a long-term high of $150,000 and Bloomberg predicting it could hit $400,000 if the currency climbs at rates comparable to the past.

Bitcoin’s Price Prediction Highs and Lows

The only thing guaranteed when it comes to crypto investing is volatility, so investors should expect more of it in the next few years. Nearly one year ago, bitcoin’s price swung as high as $68,000 and now it’s back down below $25,000. This is how high or low bitcoin’s price could go in the next few years:

What Influences Bitcoin’s Price

Normal economic factors influence the price of cryptocurrency just like any other currency or investment — supply and demand, public sentiment, the news cycle, market events, scarcity, and more. 

As a new and emerging asset, additional factors influence bitcoin’s value more than the average currency or security. Here are some:

Scarcity

There are only 18 to 19 million bitcoins currently in circulation, and minting will stop at 21 million. Industry experts consistently point to this built-in scarcity as a big part of cryptocurrency’s appeal. 

“There’s a fixed supply but increasing demand,” says Alexis Johnson, president of the blockchain public relations and events company, Light Node Media. 

Other experts point out bitcoin has value because people give it value. “That’s really why everybody’s buying — because of the psychological aspect,” says Nelson Merchan, Johnson’s Light Node Media co-founder. That can make it difficult for the average consumer to discern whether bitcoin and other cryptocurrencies are legitimate. The whole concept of supply and demand only works when people want something scarce — even if it previously didn’t exist.

“It actually does almost kind of seem like a scam,” Merchan says about bitcoin’s origins. Though he says he’s seen his crypto holdings reach millions at times since he began investing in 2017, he’s also seen them disappear in an instant.

“I’m a big believer that if it’s not in cash, you don’t really have that money because in crypto, anything can drop dramatically overnight,” Merchan says. This is why certified financial planners suggest only allocating 1% to 5% of your portfolio to crypto — to protect your money from the volatility.

Mainstream Adoption

One of the main factors driving the price increase of bitcoin is the rate at which new consumers are buying and exploring cryptocurrency, says Waltman.

“Crypto technology is being adopted at a faster rate than humans first adopted internet technology,” she says. Assuming it continues, the compounding acceleration of new adoption could keep pushing the value of bitcoin higher and higher.

Bitcoin adoption has been increasing at an annual rate of 113%, according to data from the digital asset management firm CoinShares. (Meanwhile, people adopted the internet at a slower rate of 63%.) If people warm up to bitcoin at a comparable rate to that of the internet’s early days (or faster), the report makes the case that there will be 1 billion users by 2024 and 4 billion users by 2030.
CoinDesk reported last month the number of new wallets worldwide increased 45% from January 2020 to January 2021, to an estimated 66 million. Popular crypto exchange Coinbase says it has now over 73 million worldwide users, while fellow exchange Gemini recently released its “State of U.S. Crypto Report,” which found 21.2 million Americans own cryptocurrency of some kind.

Regulation

Federal officials have made it clear in recent months they are paying attention to crypto. Industry professionals have recently alluded to what crypto insiders perceive as “hawkish” federal regulation being one key driver for bitcoin’s lagging price. In a recent CoinDesk First Mover interview, Seth Ginns, a CoinFund managing partner, said “the Fed moved to a hawkish position [on crypto regulation] just as Omicron started to tick up in the U.S.,” which could have increased doubt in crypto as a viable asset—resulting in January’s bearish sentiments.

Crypto regulation brings up a lot of unanswered questions. President Joe Biden recently signed an infrastructure bill requiring all crypto exchanges to notify the IRS of their transactions. Similarly, Treasury Secretary Janet Yellen recently said stablecoins — a type of crypto linked to the value of the U.S. dollar — should be subject to federal oversight.  

The conversation on regulatory policies is “patchy,” said an industry white paper published by  Flourish, a fintech platform designed for investment advisors. With a relatively new asset class like cryptocurrency, any new regulation has potential to impact value.

When China banned crypto in September 2021, for instance, investors saw the price of bitcoin drop, though it has since risen and resumed its usual volatility. Even though there’s now about a decade of precedent for bitcoin, the Securities and Exchange Commission is taking all decisions on a case-by-base basis in what experts refer to as its “crawl, walk, run” strategy toward mainstream crypto adoption.

“[Regulation has] kind of evolved over the last five years,” says Ben Cruikshank, head of Flourish, “Regulators can always change their mind.”

Mining Cycles

Finally, another major influence on bitcoin’s price is a cycle known as halving. It’s complicated and algorithmic in nature, but in essence halving is a step in the bitcoin mining process that results in the reward for mining bitcoin transactions getting cut in half.

Halving influences the rate at which new coins enter circulation, which can impact the value of existing bitcoin holdings. Historically, halvings have correlated with boom and bust cycles. Some experts try to predict these cycles down to the day after a halving event concludes.

What Investors Need to Know About Bitcoin Price Projections

As with any investment, financial planners and other experts advise against letting Bitcoin’s price fluctuations lead you to emotional decision-making. Studies have shown investors who contribute regularly to passive index funds and ETFs perform better over time, thanks to a strategy called dollar cost averaging. 

That’s part of why experts recommend not investing more than 5% of your overall portfolio in cryptocurrency, and never investing at the expense of saving for emergencies and paying down high-interest debt. The path to long-term wealth and saving for retirement is most often successful for people with diversified investments like low-cost index funds, with crypto making up a very small part.

And even with crypto, experts say a set-it-and-forget-it approach makes sense. “Passive investing is a very valid way to achieve financial goals,” says Arkansas-based certified financial planner Sarah Catherine Gutierrez.

Since crypto is still new to most people, it’s OK to wait and see how things unfold before putting your money on the line. We only have about 10 years of data to inform crypto price predictions, and the value of Bitcoin — while potentially climbing long-term — is highly volatile from day to day.

Volatility makes it hard to know the “what” and “why” behind your crypto strategy. Before investing in Bitcoin or any alternative assets, ask yourself what you want to achieve from your participation in this particularly volatile market, and why. That will help you stay focused.

“I don’t think people understand across the board how to value [Bitcoin],” says Gutierrez. “When you’re buying it, you need to know your expectation of what value you’re going to get from what you’re buying.”

Financial planners don’t have a bias against cryptocurrency, Gutierrez says, particularly if a client expresses an interest in learning about it. However, you should ask yourself whether you need crypto as part of your plan. In most cases, says Gutierrez, the answer is no.

“Our take is that we don’t think you need Bitcoin in order to reach financial goals,” she says, adding that the average person should favor simple ways of investing that are easy to understand. This will keep you on track for core financial goals and better position you long-term for a healthy retirement.