Cryptocurrencies attract investors and speculators with high returns. But any upward trend is sooner or later replaced by a collapse. It is difficult to predict the risk that cryptocurrency and Bitcoin will fall in value in 2024, as the quotes of tokens and coins depend on many factors. However, novice traders can estimate the likelihood of a collapse in the cryptocurrency market based on expert opinions and analytical reviews.
Bitcoin predictions
In April 2021, the BTC exchange rate broke the $64,000 mark for the first time in history. A few days later, the main cryptocurrency fell in price by almost 25%. On some sites there were forecasts of experts who predicted the collapse of the price of Bitcoin. There were opinions that the BTC rate could fall by 3 times. These fears did not come true, because in August 2021 Bitcoin returned to the $50,000 mark. But experts still predict that the crypto and the BTC rate will collapse to a minimum in the near future.
Pessimistic
In July 2021, Scott Minerd, an investment director at Guggenheim Partners, suggested that BTC will collapse to the $10,000 level in the near future. According to him, crashes in the cryptocurrency market occur dramatically, with assets depreciating in price by 75-80%. Due to the fact that the collapse of digital money is imminent, speculators are better off capitalizing on token and coin sales.
Neutral
From May to September 2021, Bitcoin quotes were in the range of $30,000-$55,000. This state of affairs suits large investors, as they can invest money without fear of collapse. At the same time, traders continue to make money on short-term fluctuations in the value of Bitcoins. There is a probability that the range of $30,000-$60,000 will be relevant for the price of BTC for a long time.
Optimistic
Billionaire and crypto investor Tim Draper predicted in June 2021 that Bitcoin quotes would rise to $250,000. In his opinion, digital currencies will soon be widely used in everyday life. In addition, Draper emphasized the impact of deflation on the asset’s prospects.
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The maximum number of Bitcoins is limited to 21 million, of which 18 million have already been issued. The cryptocurrency will not collapse, because at some point new coins will stop being mined, and the demand for them will continue to grow.
Falling BTC quotes
The price of the main cryptocurrency is affected by the following factors:
| Positive | Negative |
|---|---|
| User interest in decentralized finance. | Lack of collateralization. |
| High profitability in 2009-2021. | Emergence of competitors. New cryptocurrencies use less energy and work with more advanced algorithms. |
| Instability in the global economy. Many investors are withdrawing money from stock markets and investing in digital currencies. | Restrictions on mining and circulation of anonymous money by government agencies. |
| Increased use of Bitcoin in everyday transactions. | Decreased interest from speculators who used to push the cryptoasset rate upward. |
If large investors decide that investing in Bitcoin has more downsides than upsides, quotes could plummet. Skeptics even claim that Bitcoin is a typical financial bubble that will inevitably burst.
Change in trends
In favor of negative forecasts of BTC dynamics is another factor: too long growth of cryptocurrency quotes. The longer the trend lasts, the more people expect it to change.
Assets do not appreciate indefinitely, sooner or later there will be a correction or a deep drop in quotes. During such periods, large investors try to sell koins and transfer their investments to safer areas (stock markets, bank metals, fiat).
If BTC does not update the record price marks, there is a risk of a rapid change of trend.
When Bitcoin will fall
It is impossible to predict how long it will take and how intensely Bitcoin will fall in price:
- Skeptics believe that the collapse of cryptocurrencies will happen the other day. Once the bubble bursts, the capitalization and liquidity of digital assets will decrease, and the Bitcoin price chart will continuously decline.
- More cautious experts believe that BTC will start falling in a few months.
- Optimists and the largest holders of crypto-assets make opposite predictions. In their opinion, Bitcoin will soon become the most profitable investment destination again.
In a week.
A sharp decline in the BTC rate can be associated with loud and unexpected news. Specifically, in 2021, the government in China banned mining (mining new blocks on the Bitcoin network). These restrictions slowed down transaction verification. If mining bans continue in other countries, Bitcoin could become a dysfunctional network where transfers take too long to process. Traders tend to sell assets in such situations, leading to a collapse and panic.
At the end of 2024.
The second possible reason for the fall in the price of BTC is profit taking. Experienced investors try to sell some assets at the end of the year to withdraw the income in fiat money or direct the funds to safer instruments. In case of mass profit taking, the supply on the cryptocurrency market will exceed the demand. There will be too many sellers, which will lead to a deep drop in the quotes of the main koins.
Forecast for 2024
The near future of cryptocurrencies will be affected by their stability. Many large investors are in no hurry to invest in tokens and coins for fear of bankruptcy. The longer Bitcoins remain stable, the higher the interest from businessmen and investment funds.
Prediction for 2024
The distant future of cryptoassets depends on their practical application. If decentralized networks become popular in everyday life, there will be a natural demand for digital currencies.
Conclusions
Bitcoin’s prolonged uptrend could be replaced by a sharp decline. Skeptics warn that Bitcoins are hardly used in everyday life and will depreciate once the hype dies down. The future of cryptocurrencies largely depends on this very factor. Quotes need demand to continue to rise, which is emerging as blockchain technology is adopted into everyday life.
Frequently Asked Questions
💵 How to make money on Bitcoin price drop?
The main way to profit from falling quotes is to open short positions. If the asset loses in price, it makes sense to take a loan in Bitcoins and buy another digital currency or fiat. After the quotes decrease, the trader makes an exchange in the opposite direction, returns the loan and keeps the difference.
📈 Are there assets that go up when Bitcoin goes down?
Yes. Some derivatives (futures, perpetual contracts, options) rise in value during a BTC collapse.
🔀 How do crypto traders determine the moment of trend change?
There is no single criterion by which you can predict the collapse of quotes. Traders use methods of fundamental, technical analysis, study charts of cryptoassets and listen to the opinion of experts.
📉 What tokens and coins are not in danger of collapse?
In case of a global decline in the price of cryptocurrencies, you should transfer your savings into fiat or buy stablecoins – assets with a fixed market rate.
❓ How does Bitcoin collateralization affect risk?
Fiat currencies are protected from a sharp decline. Even when the economy is unfavorable, there are people who need the currency to order goods or pay creditors. Bitcoins have no such collateral, so BTC can collapse sharply if there are no buyers in the market.
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Author: Saifedean Ammous, an expert in cryptocurrency economics.
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