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Crypto is a new frontier with several complications that most people may not understand. Find out the main factors that impact Bitcoin’s future. 

Bitcoin is undoubtedly the most prominent cryptocurrency, championing the adoption of cryptocurrencies worldwide. However, it is also a relatively new frontier, with several potential benefits and pitfalls. While experts provide predictions and analysis to help investors avoid risks, the crypto market is highly volatile.

Predicting the crypto market or Bitcoin’s prices with the utmost accuracy is extremely difficult. However, understanding Bitcoin’s unique characteristics, history, and present performance can reveal its future. The following article explores the key factors impacting Bitcoin’s future and how those scenarios would unfold.

Diminishing Supply

Supply is one of the critical elements determining a commodity’s value and usage in an economy. Unlike fiat currencies and other traditional assets, Bitcoin has a limited supply, capped at 21 million tokens only. Miners have already generated about 90% of the total available Bitcoin currently circulating.

Complicates Bitcoin's

Besides, Bitcoin’s supply is subject to halving, which reduces the number of rewards issued to miners by half every four years. The process has occurred twice, cutting the awards from 50 BTC to 12.5 BTC. The mining rewards will eventually halt when miners attain the 21 million coin threshold.

The above elements impact Bitcoin’s diminishing supply while its market demand spikes. While experts believe the declining supply and growing demand would drive Bitcoin prices higher, no substantial proof exists. Thus, those factors could significantly complicate Bitcoin’s future.

Crypto Regulations

Regulators around the globe have increasingly proposed different measures to regulate the crypto industry. Regulatory authorities have started to pay keen attention to the growth of cryptocurrencies such as Bitcoin, citing their links to money laundering, terrorism funding, drug trafficking, and other fraudulent schemes.

Some governments have already passed crypto regulations. For example, Canada recently amended its Proceeds of Crime and Terrorist Financing Act, requiring businesses dealing with cryptocurrencies to register with the Federal Intelligence Unit.

The United States SEC now requires investors involved with crypto to declare those assets as property when filing tax returns. The regulators also require crypto businesses such as  TrustPedia to obtain relevant certification ad licensing before engaging in the exchange of virtual currencies.

 Bitcoin adoption is not restricted in many countries because it is a decentralized currency without a central authority. However, some countries like China have banned their institutions from dealing in crypto and are increasingly cracking down on crypto businesses. It is unclear how far the regulations will go, but the mounting pressures could undoubtedly complicate Bitcoin’s future.

User Adoption

The adoption of Bitcoin also has a significant influence on its future. Its popularity can considerably drive prices up, while a low demand could hinder its growth. Many governments, corporations, merchants, investors, and individuals worldwide adopt Bitcoin, indicating potential future development.

A report conducted between 2012 and 2018 showed a gradual increase in Bitcoin addresses with 100 to 1000 BTC. Meanwhile, Bitcoin prices fluctuated between 2012 and 2015 as the mining difficulty decreased for a short period. In 2016 and 2017, Bitcoin prices hiked, with the mining difficulty also increasing. That slowed Bitcoin’s growth significantly.

While the future of individual cryptocurrencies such as Bitcoin is a bit complicated, the industry is rapidly growing. It is almost impossible to predict Bitcoin’s prices accurately, but its Strength Indicator shows it can effectively stand the test of time. Many experts and investors expect the prices to grow and stabilize in the future as several mainstream institutions adopt Bitcoin. Thus, Bitcoin’s future could be bright despite the challenges that hinder its adoption and usage.


Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.

Cryptocurrency trading involves high risk, and is not suitable for all investors. Before deciding to trade cryptocurrencies, tokens or any other digital asset you should carefully consider your investment objectives, level of experience, and risk appetite.  TaxGuru does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions. By the use of the above information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof.

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May 2024