As a seasoned analyst with over two decades of experience in the financial industry, I have witnessed the rise and fall of countless investment trends. Yet, none have captivated my attention quite like Bitcoin. The digital currency’s meteoric rise has been nothing short of astonishing, and its potential to become a stable global currency is truly intriguing.
Over the years, Bitcoin (BTC), currently valued at $67,636 with a 24-hour volatility of 1.4%, has been touted as a dependable store of value and a revolutionary investment option. Yet, recent speculations about its future have sparked debates that were once considered unthinkable.
Although the cryptocurrency has already established itself as a notable defense against inflation, it seems that its potential for the future is even greater.
Ki Young Ju, CEO of CryptoQuant, predicts that Bitcoin may transform into a stable currency by the year 2030. Should it successfully establish this stability, it could potentially rise to the level of a globally recognized currency.
Ju’s forecast relies on his observation of a growing institutional investment in Bitcoin mining as well as associated activities. Over the last three years, this trend has led to a significant 378% increase in the complexity of Bitcoin mining, with the rise primarily fueled by larger entities joining the mining sector.
Institutional Investors May Drive Bitcoin toward Stability
Simultaneously, Ju holds the view that the persistent increase in Bitcoin’s mining complexity might prove beneficial in the long run. He posits that this trend could help Bitcoin transition from a speculative asset to a more stable currency.
It’s common knowledge that Bitcoin is frequently associated with significant price fluctuations, which can make it less practical for everyday transactions compared to conventional currencies.
As more significant financial entities become increasingly involved, according to Ju, the concern over stability might soon become obsolete.
As an analyst, I recently noted in a post on X that major fintech companies are anticipated to spearhead the widespread acceptance of stablecoins within the next three years. These stablecoins are digital currencies engineered to minimize volatility, typically backed by reliable assets such as the US dollar. I foresee that by 2028, when Bitcoin experiences its subsequent “halving event,” discussions about Bitcoin’s transition into a mainstream currency will gain significant traction.
As a crypto investor, I’ve noticed several indications suggesting that Bitcoin’s notorious price volatility might decrease in the near future.
There’s a point to consider about Layer-2 solutions like the Lightning Network. So far, these second-layer systems have not kept pace with blockchain alternatives that have venture capital backing. Nevertheless, according to Ju, the success of these L2s hinges on the level of institutional support they receive. This, in turn, aids Bitcoin in managing transactions more effectively.
Additionally, it’s important to note that Bitcoin Layer 2 alternatives encounter competition from other solutions such as Wrapped Bitcoin (WBTC), a platform that seamlessly incorporates Bitcoin into multiple ecosystems, offering an easier experience compared to the complexities of L2 infrastructure.
What’s Next?
The possibility of Bitcoin becoming a stable currency down the line hinges significantly on its current market value. Notably, the price level of approximately $65,000 is now a significant factor influencing its stability after Bitcoin peaked at an all-time high of around $69,000 in recent times, which was last seen since June.
According to analysts like Keith Alan from Material Indicators, if Bitcoin manages to stay above its 21-week moving average, it might experience a brief period of growth. Some experts even propose that Bitcoin could challenge its record high again before the year is over. Nevertheless, broader economic conditions might still influence its behavior.
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2024-10-24 17:42