It’s been a rocky start to the year for Bitcoin, but experts still say it will hit $100,000 — and that it’s more a matter of when, not if.

Bitcoin’s price plunged down to $35,500 Friday after a brief rally earlier in the week, primarily driven by the Federal Reserve’s announcement that it is raising its benchmark interest rate by half a percentage point.

The Fed signaled that it will continue raising rates aggressively in the coming months and begin reducing asset holdings on its $9 trillion balance sheet in June.

Investors continue to wrestle with concerns over rising inflation, geopolitical tensions, and the possibility of tighter monetary policy by the U.S. Federal Reserve.

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The crypto market has increasingly tracked the stock market in recent months, which makes it even more intertwined with global economic factors.

With no end in sight, the war, inflation, and shifting monetary policy in the U.S. will likely continue to drive more volatility in the coming weeks and months, experts say.

“The overall market has noticed the high correlation to Bitcoin and the general equities markets,” says Armando Aguilar, head of alternative strategies and research for Ledn, a digital asset savings and credit platform.

“The S&P 500 and NASDAQ have had the largest correlations to Bitcoin with 0.88% and 0.91%, respectively. A correlation of one means that they move equally one to the other.”

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Bitcoin has only been above $45,000 for a few short stretches over the past four months, and hasn’t been above $50,000 since Dec. 25, 2021. Still, Bitcoin has stayed above its 6-month low below $34,000 in late January.

Amid the ups and downs, Bitcoin’s current price is a long way off from the latest all-time high it hit in November, when it went over $68,000. But even with the recent decline in price, Bitcoin is still more than twice as valuable as it was just a couple years ago. For Bitcoin, these kinds of ups and downs are nothing new.

Despite the volatility and recent slumping price, many experts still say Bitcoin is on its way to passing the $100,000 mark, though with varying opinions on exactly when that will happen.

And a recent study by Deutsche Bank found that about a quarter of Bitcoin investors believe Bitcoin prices will be over $110,000 in five years.

The volatility is nothing new, and is a big reason experts say new crypto investors should be extremely cautious when allocating part of their portfolio to cryptocurrency.

Bitcoin has shown as steady a rise in value over the years as any other cryptocurrency on the market. It’s only reasonable for Bitcoin investors to be curious about how high it can ultimately go.

Unfortunately, Bitcoin’s price is extremely difficult to predict and even more susceptible to market factors than more established asset classes. But we decided to ask some experts for their best guesses anyway. Here’s what they said:

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Bitcoin Price Predictions
It was easy to predict a $100,000 Bitcoin price late last year, coming off its latest all-time high in November. With Bitcoin’s big fall since then, the prediction game is even trickier.

The most extreme crypto skeptics say Bitcoin will tank to as low as $10,000 in 2022, but a middle ground might be to say the cryptocurrency can still climb to $100,000 like many experts predicted late last year — just on a slower timeline.

“The most knowledgeable educators in the space are predicting $100,000 Bitcoin in Q1 2022 or sooner,” Kate Waltman, a New York-based certified public accountant who specializes in crypto, told us back in November 2021.

But now, bullish experts are re-evaluating the crypto industry altogether as major corporations like Nike and other big brands are looking at ways to monetize their products in the digital metaverse.

The rise of metaverse games, worlds, products, and experiences is increasing the popularity of altcoins, which has changed investors’ sentiments about Bitcoin (known as the original crypto).

Many experts are hesitant to predict a number and a date, but rather point to the trend of Bitcoin increasing its value over time.

Investors should expect a “pretty sustainable” rise in Bitcoin’s long-term value driven by organic market movement, with the $100,000 threshold in near sight, predicted Jurrien Timmer, director of global macro at Fidelity Investments, last October.

“What I expect from Bitcoin is volatility [in the] short-term and growth [in the] long-term,” says Kiana Danial, founder of Invest Diva and author of “Cryptocurrency Investing For Dummies.”

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Here are some more predictions we found, ranked from low to high over the next year:

Ian Balina

Point of View: Bitcoin investor and founder of crypto research and media company Token Metrics

Prediction: Bitcoin can go to $100,000-$150,000, but the timeline is unclear

Why: Bitcoin is in a bearish sentiment cycle, but the total crypto market and other crypto asset classes are not. Bitcoin was the first cryptocurrency, but now others have surpassed it in innovation when it comes to what experts call “Web 3” — aka the new internet built on blockchain. The release of new altcoins and hype about the metaverse will continue to drive the demand for crypto, and Bitcoin will therefore bounce back eventually.

Matthew Hyland

Point of View: Technical analysis and blockchain data analyst

Prediction: Bitcoin can reach $100,000 in 2022

Why: The price of Bitcoin in January 2022 is almost equal to its price in January 2021, but there’s a new demand for altcoins. There’s also an ongoing trend of Bitcoin supply leaving major exchanges (presumably to be stored in offline crypto wallets), Hyland said in a tweet. He also recently tweeted that a dip below $40,000 could lead to “free fall” into a Bitcoin bear market.

Robert Breedlove

Point of View: Founder and CEO of the digital assets marketing and consulting firm Parallax Digital

Prediction: $307,000 by October 2021 (now passed), and $12.5 million by 2031

Why: Inflationary pressures after COVID-19 will drive interest in cryptocurrency, pushing the value of Bitcoin up higher than previous projections estimated, Breedlove said in an interview earlier this year. Known as more of a philosopher type among crypto enthusiasts, Breedlove speaks often about the broader social implications of crypto as a form of more transparent, decentralized currency — but his price predictions haven’t exactly been spot-on.

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Big financial institutions have made their own predictions, as well, with JPMorgan predicting a long-term high of $146,000 and Bloomberg predicting it could hit $400,000 if the currency climbs at rates comparable to the past.

PRO TIP

Even if Bitcoin breaks $100,000, stay focused building on your overall portfolio including passive index funds, emergency savings, and your retirement account(s).

What Influences Bitcoin’s Price

Normal economic factors influence the price of cryptocurrency just like any other currency or investment — supply and demand, public sentiment, the news cycle, market events, scarcity, and more.

As a new and emerging asset, additional factors influence Bitcoin’s value more than the average currency or security. Here are some:

Scarcity

There are only 18 to 19 million Bitcoins currently in circulation, and minting will stop at 21 million. Industry experts consistently point to this built-in scarcity as a big part of cryptocurrency’s appeal.

“There’s a fixed supply but increasing demand,” says Alexis Johnson, president of the blockchain public relations and events company, Light Node Media.

Other experts point out Bitcoin has value because people give it value. “That’s really why everybody’s buying — because of the psychological aspect,” says Nelson Merchan, Johnson’s Light Node Media co-founder.

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That can make it difficult for the average consumer to discern whether Bitcoin and other cryptocurrencies are legitimate. The whole concept of supply and demand only works when people want something scarce — even if it previously didn’t exist.

“It actually does almost kind of seem like a scam,” Merchan says about Bitcoin’s origins. Though he says he’s seen his crypto holdings reach millions at times since he began investing in 2017, he’s also seen them disappear in an instant.

“I’m a big believer that if it’s not in cash, you don’t really have that money because in crypto, anything can drop dramatically overnight,” Merchan says.

This is why certified financial planners suggest only allocating 1% to 5% of your portfolio to crypto — to protect your money from the volatility.

Mainstream Adoption

One of the main factors driving the price increase of Bitcoin is the rate at which new consumers are buying and exploring cryptocurrency, says Waltman.

“Crypto technology is being adopted at a faster rate than humans first adopted internet technology,” she says. Assuming it continues, the compounding acceleration of new adoption could keep pushing the value of Bitcoin higher and higher.

Bitcoin adoption has been increasing at an annual rate of 113%, according to data from the digital asset management firm CoinShares. (Meanwhile, people adopted the internet at a slower rate of 63%.) If people warm up to Bitcoin at a comparable rate to that of the internet’s early days (or faster), the report makes the case that there will be 1 billion users by 2024 and 4 billion users by 2030.

CoinDesk reported last month the number of new wallets worldwide increased 45% from January 2020 to January 2021, to an estimated 66 million.

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Popular crypto exchange Coinbase says it has now over 73 million worldwide users, while fellow exchange Gemini recently released its “State of U.S. Crypto Report,” which found 21.2 million Americans own cryptocurrency of some kind.

Regulation

Federal officials have made it clear in recent months they are paying attention to crypto. Industry professionals have recently alluded to what crypto insiders perceive as “hawkish” federal regulation being one key driver for Bitcoin’s lagging price.

In a recent CoinDesk First Mover interview, Seth Ginns, a CoinFund managing partner, said “the Fed moved to a hawkish position [on crypto regulation] just as Omicron started to tick up in the U.S.,” which could have increased doubt in crypto as a viable asset—resulting in January’s bearish sentiments.

Crypto regulation brings up a lot of unanswered questions. President Joe Biden recently signed an infrastructure bill requiring all crypto exchanges to notify the IRS of their transactions. Similarly, Treasury Secretary Janet Yellen recently said stablecoins — a type of crypto linked to the value of the U.S. dollar — should be subject to federal oversight.

The conversation on regulatory policies is “patchy,” said an industry white paper published by Flourish, a fintech platform designed for investment advisors. With a relatively new asset class like cryptocurrency, any new regulation has potential to impact value.

When China banned crypto in September 2021, for instance, investors saw the price of Bitcoin drop, though it has since risen and resumed its usual volatility. Even though there’s now about a decade of precedent for Bitcoin, the Securities and Exchange Commission is taking all decisions on a case-by-base basis in what experts refer to as its “crawl, walk, run” strategy toward mainstream crypto adoption.

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“[Regulation has] kind of evolved over the last five years,” says Ben Cruikshank, head of Flourish, “Regulators can always change their mind.”

Mining Cycles

Finally, another major influence on Bitcoin’s price is a cycle known as halving. It’s complicated and algorithmic in nature, but in essence, halving is a step in the Bitcoin mining process that results in the reward for mining Bitcoin transactions getting cut in half.

Halving influences the rate at which new coins enter circulation, which can impact the value of existing Bitcoin holdings. Historically, halvings have correlated with boom and bust cycles. Some experts try to predict these cycles down to the day after a halving event concludes.

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What Investors Need to Know About Bitcoin Price Projections

As with any investment, financial planners and other experts advise against letting Bitcoin’s price fluctuations lead you to emotional decision making. Studies have shown investors who contribute regularly to passive index funds and ETFs perform better over time, thanks to a strategy called dollar cost averaging.

That’s part of why experts recommend not investing more than 5% of your overall portfolio in cryptocurrency, and never to invest at the expense of saving for emergencies and paying down high-interest debt. The path to long-term wealth and saving for retirement is most often successful for people with diversified investments like low-cost index funds, with crypto making up a very small part.

And even with crypto, experts say a set-it-and-forget-it approach makes sense. “Passive investing is a very valid way to achieve financial goals,” says Arkansas-based certified financial planner Sarah Catherine Gutierrez.

Since crypto is still new to most people, it’s OK to wait and see how things unfold before putting your money on the line. We only have about 10 years of data to inform crypto price predictions, and the value of Bitcoin — while potentially climbing long-term — is highly volatile from day to day.

Volatility makes it hard to know the “what” and “why” behind your crypto strategy. Before investing in Bitcoin or any alternative assets, ask yourself what you want to achieve from your participation in this particularly volatile market, and why. That will help you stay focused.

“I don’t think people understand across the board how to value [Bitcoin],” says Gutierrez. “When you’re buying it, you need to know your expectation of what value you’re going to get from what you’re buying.”

Financial planners don’t have a bias against cryptocurrency, Gutierrez says, particularly if a client expresses an interest in learning about it. However, you should ask yourself whether you need crypto as part of your plan. In most cases, says Gutierrez, the answer is no.

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“Our take is that we don’t think you need Bitcoin in order to reach financial goals,” she says, adding that the average person should favor simple ways of investing that are easy to understand. This will keep you on track for core financial goals and better position you long-term for a healthy retirement.

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