When you begin investing in Bitcoin, there are two different scenarios that nearly all investors are hoping for. The first is that we are all hoping to see the price of Bitcoin increase greatly, which in turn makes the value of our portfolio go up as well. The second most common wish is that many hope to see the price dip significantly. This is because many people feel like they were late to Bitcoin and aren’t satisfied with their entry price. Buying Bitcoin 70% below its all-time high of $69k set in 2021 feels a lot better than buying at its peak. After prices have dropped significantly they can get much more “bang for their buck” and accumulate much more.
However, when it comes to Bitcoin’s price there is a third option that is often the most mentally taxing. That is when prices become extremely boring. Moving sideways at a snail’s pace, with what seems like absolutely no movement. It causes the market to quickly become boring. While the truth is that these are often some of the best chances to accumulate. The boredom can be too much for most people. Causing them to lose interest, confidence, or even enthusiasm for this market. And so one of the greatest opportunities is lost.
We are still early in 2023, which means that people’s predictions for how Bitcoin will perform this year are still very popular. There have been numerous predictions of up or down. But perhaps the most likely option is that Bitcoin’s price will go sideways.
Aside from last year's crypto market insolvencies, one of the key reasons why Bitcoin’s price dropped significantly was due to macro factors. While these factors seem to be slowly leveling off. The truth is that there is likely still a lot of pain to come. Inflation numbers are still incredibly high. At least in the US, it appears that it is likely heading into a recession, and more people are being laid off from their jobs by the week. People around the world are having a difficult time staying afloat financially and buying only the essentials. Let alone, thinking about putting extra money into risk assets such as Bitcoin. The war between Russia and Ukraine is still happening with no end in sight. Turkey and Syria have been victims of one of the worst natural disasters in recent memory. The world isn’t thinking about investing, but just surviving.
Bringing it back to the world of Bitcoin and crypto, frankly, there isn’t a lot happening that could turn the market bullish. Ordinals bringing NFTs to Bitcoin have been the talk of the market the last few weeks, but it is too early to tell if this will actually cause the price of Bitcoin to increase.
The Ethereum Shanghai update is likely the most hyped event in the first half of this year. Finally, those who have locked up their ETH into staking will begin to be able to withdraw. While this will add a lot more confidence into ETH staking, which could cause bullish price movements in the future. However, there is no denying that ETH being withdrawn could be a potential downward price force for not only Ethereum but the crypto market in general.
Aside from these two things, the next monumental event on the horizon is the Bitcoin halving next year. Which, means the market could become very quiet.
The scenario you need to be ready for.
Over the last two years, we have learned that anything can happen with Bitcoin, there are no longer any sacred cows in this market. We once thought that because Bitcoin’s price had never fallen below its previous all-time high, it would never fall below $20k ever again. But it did, and that sacred theory was torn to shreds. Another sacred theory is Bitcoin is 4 years cycles, with each bull cycle being ignited by the Bitcoin halving.
Since we have already learned that anything can happen, we also need to be prepared for the scenario that nothing happens to the price of Bitcoin after the halving. With everything happening in the world macro-wise, there is a very real chance that Bitcoin’s price could move sideways for 1 to 3 years.
If the halving had no effect on Bitcoin’s price, would that cause you to lose confidence in the market? If the market became stagnant for multiple years without any breakouts, would you be able to maintain interest and continue building your portfolio?
These are all questions that we need to be thinking about. In the cryptocurrency market, we must always be ready for the unexpected. Ready to adjust our strategy and make a move in an instant if necessary. This is something many of us experienced during the last year with many crypto companies becoming insolvent.
As for me, I would welcome multiple years of nothing happening to Bitcoin’s price. My conviction in the asset is already set, and I would be glad to have the extra time to accumulate even more. We all must recognize that the world is very different than it was just a few years ago, and that includes Bitcoin as well. Anything could happen, and we need to be ready for it.
How about you? Would your confidence in Bitcoin be broken if the next halving had little to no effect on its price?
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