Is There an Imminent Bitcoin Crash?

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Cryptocurrencies are highly volatile assets, with constantly shifting boom and bust cycles. Bitcoin has also experienced a similar trend, with price fluctuations over the recent months. Its price hit a record high of $20,000 in December 2020, climbing further to $63,375 in April 2021. However, things took a downturn in June 2021, when the prices plummeted to below $30,000 for the first time in five months. In August 2021, Bitcoin's price rallied again to $40,000 and has kept climbing since then. 

Despite the above statistics, Bitcoin has reported two significant crashes since its inception. The first one occurred between April 10 and 12, 2013, when it lost more than 80% of its value. The second one was in 2017 when Bitcoin's value peaked at $20,000 then began to collapse again. Those are some of the significant events that have made investors worried about an imminent Bitcoin crash. 

Will We Experience Another Bitcoin Crash?

One financial market expert argues the next major Bitcoin crash would shed up to 90% of its value, causing it to stagnate in the long term. However, some economists have predicted Bitcoin's value could surge by 500% before such a downturn occurs, leveraging the massive gains it has acquired over the past year. 

A series of events, including the coronavirus pandemic, cut Bitcoin's value by almost half in 2020. However, it has steadily risen by more than 1,000% in the past few months, currently trading at just a few thousand dollars shy of its $61,000 record-high. While users expect the rally, Bitcoin's final destination is not entirely clear at the moment. 

Many experts remain divided on the future of Bitcoin's price but, the majority agree 2021 is a bull market year. Bitcoin's bull market cycle occurs every three to four years, after which the value could depreciate to some extent. However, some crypto analysts say the latest market rally is not like the previous ones and might not necessarily end similarly. 

Many cryptocurrencies have come into the market in recent months, imposing increasing competition to Bitcoin. However, there are signs its value would surge due to the increasing institutional investments and retail adoption. Besides, leading crypto exchanges like the Crypto Genius project increased trading volumes, with several mainstream financial institutions rapidly adopting it too. 

Many notable figures in the crypto world have predicted Bitcoin's price would hit $100,000 at the end of 2021. Some investors have even expected higher values than that, citing solid institutional demand in the coming months. However, various factors could hinder Bitcoin from reaching that goal. 

As one analyst warns, the rising Bitcoin prices could likely spark increased mainstream attention, attracting more scrutiny from regulators. That would disrupt the ongoing Bitcoin adoption by financial institutions, retailers, and individuals, stagnating its value. 

The Next Step for Bitcoin 

A crash is more likely when asset prices rise very quickly and, that is why some investors are increasingly worried about Bitcoin's fate. However, there are no guarantees for virtual investments like Bitcoin since their prices could rapidly surge after a fall. Nevertheless, there are various concerns about crypto. 

The ongoing crackdown on crypto businesses in China is one of the biggest concerns inducing a Bitcoin crash. Others include environmental concerns and the calls for increased regulation of cryptocurrencies worldwide. Besides, Bitcoin's price solely depends on speculation. 

Bitcoin and other digital currencies are highly volatile, with prices moving up and down constantly. Thus, it is difficult to accurately predict an imminent crash or rise in Bitcoin's value. As an investor, an ideal approach is to invest cautiously, spreading your investments over a while. That would generate better returns and cushion you from the impacts of volatility.  

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