Conflicting price predictions for major cryptocurrencies
The financial crisis has led to people losing trust in banks, with hundreds of billions of US dollars in deposits recently being withdrawn from banks.
However, not everyone prefers to keep their withdrawn funds in cash; many investors choose to invest in cryptocurrencies as an alternative to deposits.
While forecasts for this type of asset are far from clear-cut, some predict sky-high prices for major cryptocurrencies, while others predict the market will fall to a new low.
Currently, the price of Bitcoin is around $30,000, and the second most popular digital currency, Ethereum, is approaching the $2,000 mark per coin.
What are the positive forecasts based on?
The most optimistic forecast of the past month came from Equity Management Associates investment fund manager Larry Lepard. He claimed that the price of Bitcoin would reach $10 million by 2033.
His forecast is based on the imminent collapse of the American currency, which has forced people to look for alternative assets to store their savings.
According to him, gold and Bitcoin will be the most popular options, but unlike gold, the supply of coins is limited to 21 million. Therefore, increased demand will inevitably cause the price of this cryptocurrency to increase tenfold.
Bitcoin's popularity is also boosted by the fact that some large companies have also increased their investments in the asset. For example, the well-known corporation Micro Strategy recently purchased $30 million worth of Bitcoin.
Validity of negative forecasts
Some analysts, on the contrary, predict the price of the main cryptocurrency at the level of 4,000 US dollars per coin, and the well-known cryptocurrency skeptic Peter Schiff even predicts a fall to 1 dollar.
This forecast is based on the fact that cryptocurrency has no real backing and is quite susceptible to panic sentiment.
It only takes another crypto exchange to collapse or a ban on transactions using digital money for the rate to plummet.
The ongoing investigations into abuses in the cryptocurrency market also provide little cause for optimism. The funds that back cryptocurrency are regularly misused.
It should be noted that such forecasts are not unfounded; people will invest money in cryptocurrencies as long as there is something to invest.
If the global crisis forecasts come true and the US dollar actually collapses, the most popular assets will be futures , not virtual currencies.
A reasonable price for Bitcoin is $50,000-$60,000, but if Bitcoin were to reach $10 million, the dollar would be so devalued that a million would buy a cup of coffee.
Therefore, cryptocurrencies can only be recommended as a means of diversification , but it's not recommended to invest all your savings in this rather risky asset. Most financial analysts recommend keeping no more than 10% of your capital in cryptocurrencies.
All about earning money on cryptocurrencies - https://time-forex.com/kriptovaluty
