Cryptocurrency and price swings have been like Yin and Yang for as long as anyone could remember. As the leading cryptocurrency in the ecosystem, bitcoin has gone through a whirlwind period over the last one year, leading to a loss of over 65% of its value.
However, alongside Ethereum, most crypto enthusiasts had high hopes as 2024 rolled in with promises of better days. It's now July of the same year and BTC is trading at $57,400 with a market cap of $1.13 trillion. The question is, can the projection of $1,000,000 by 2025 be a possibility?
Blind Spots
The events that have almost driven BTC to its knees over the last year and a half have mostly come as a surprise to crypto enthusiasts. Chief amongst them are the Terra Luna crash, FTX decline, Binance's legal issues and other macroeconomic factors. There was no way anyone could have foreseen, for example, that an anonymous entity would unstake $2B of UST from the Anchor Protocol.
Even if anyone could have predicted that, they couldn't have predicted that this anonymous entity would proceed to sell off hundreds of thousands worth of UST. This singular act pushed the price down to $0.91 cents and brought in too many buyers against too little Luna cryptocurrency. One could say the same for perhaps every other contributing factor on that list.
ETF to the Rescue?
For a market as volatile as the cryptocurrency ecosystem, it is these unpredictable events that make such price projections very difficult to rely on. But that is not to say it's absolutely impossible. It's not.
Some experts believe BTC possesses unique characteristics that make it different from every other cryptocurrency in the world. It is believed that the recent seal of approval given to spot Bitcoin exchange-traded funds (ETFs) will make the process more simple, to attract more investors to the ecosystem.
The spot bitcoin ETFs can completely revolutionize the way the average investor interacts with BTC. They can now purchase shares of the ETF through a brokerage, completely bypassing the myriads of crypto exchanges and without having to manage digital wallets. The idea is that, with more regular investors on board who would ordinarily not touch crypto with a long pole, bitcoin would witness an increase and be well on its way to reaching its $1,000,000 potential by 2025.
However, the downside to that projection is that most ETFs are currently owned by retailers who trade on behalf of institutions. But it is believed that could change as more investors come on board. Who knows, we could be paying our taxes in bitcoin in a few years!
The Bitcoin Halving
Also, another reason for the enthusiasm most crypto experts showed coming into the year was the bitcoin halving event. The Bitcoin halving event comes up every four years during which rewards to BTC miners are reduced by 50%. This has historically provided a platform to boost BTC momentum. However, the halving event which took place on April 20 this year, has not quite had the expected effect. The current state of BTC is still on a downward slope.
Ultimately, the biggest reason Bitcoin has remained the biggest cryptocurrency over the years is its resilience. Bitcoin has gone through crazy periods but it always comes out stronger. This is why, while no one can say for a fact that bitcoin will reach the $1,000,000 price projection by 2025, no one can equally say for a fact that it won't. Amazing, right?