Bitcoin currently has a market cap of about $60 billion and, experts project its value and price will keep rising in the future. It is also the most lucrative and attractive digital currency in the market that serves as a store of value and mode of payment. However, all cryptocurrencies, including Bitcoin, are highly volatile, with prices constantly shifting based on market conditions. And public perception is one of the critical elements that influence Bitcoin’s worth and value.
The Future of Bitcoin
Bitcoin’s Market Cap
Despite Bitcoin’s immense popularity, its market cap is still relatively smaller than the global currency market. One way to grasp the concept is to metaphor a fat man jumping into a small swimming pool. He will create a huge splash and drench everyone around as he drops into the pool. That would displace a lot of water and change the levels significantly. On the other hand, the same guy would make almost no impact when he jumps into a large water body like a lake. It would be impossible for him to change the water level.
The fat guy in the above analogy represents an investor with huge money, while the water is Bitcoin. Unlike fiat currencies, Bitcoin is still in the early adoption phase and far from being a lake. That creates a ripple effect on Bitcoin’s price whenever someone enters or leaves the market. As such, the cost would only stabilize when Bitcoin attains a larger market cap than the current $60 billion.
Despite Bitcoin’s billion-dollar market cap, the most stable coins are worth trillions. Its liquidity is still minimal compared to other mainstream currencies issued by governments and central banks. Many companies and individuals currently use Bitcoin to invest and pay for goods and services. However, it has not yet achieved the level of adoption and usage experienced by dominant fiat currencies like the U.S. dollar. Therefore, Bitcoin’s liquidity would only increase with mass adoption by mainstream financial institutions, governments, and businesses, ensuring fewer fluctuations. Venezuela and Zimbabwe are examples of countries already pushing towards that achievement.
Although regulations might induce short-term falls in Bitcoin’s price, it is likely to impact explosive growth in the long term, significantly reducing volatility. World powers like the U.S are pretty slow in regulating cryptocurrencies but, smaller nations are already developing crypto-friendly markets.
For example, Malta is currently developing legislation that would offer businesses a friendly operating environment, creating the possibility of pairing fiat currencies and other ways of integrating conventional financial instruments. That would increase Bitcoin’s liquidity and stability.
Many leading crypto exchanges like Bitcoin Prime have reported that the crypto market remains subject to many manipulations. Regulations are the best option to ending market manipulation. Implementing regulations would significantly narrow cryptocurrencies’ volatility and generate huge returns, almost similar to the stock markets.
The world has had Bitcoin for over ten years but, the crypto industry is still in its infancy. Blockchain experts say Bitcoin’s adoption would not only come from the primary vision of a P2P currency but blockchain’s multi-faceted integration into the various aspects of daily life.
The blockchain ecosystem is stabilizing, which could create a new digital economy, supported by its application in various services such as shipping tracking and supply chain management. The adoption of blockchain would rapidly increase the public’s trust and usage of cryptocurrencies, thereby also driving Bitcoin’s market cap, liquidity, and stability.
Bitcoin is primarily a deflationary currency whose value should appreciate over time. Despite the volatility risks, Bitcoin has a good track record and will continue to rise in value in the coming years.