I want to write about this topic in depth. Rather than a short-term analysis, it is important for me to write about what might happen in the next 10-20 years so that when I read this article again in the future, I can see if I was right or not. I have organized my writing under four main headings: Adaptation, Emotionalism, Market Cycles, and Price Expectations.
Table of Contents
1-Adaptation
Cryptocurrencies entered our lives in 2008 with Bitcoin. Since then, if we look at the long term, we can say that it has never encountered a bear market. Despite experiencing 90% drops, it has undoubtedly been the most profitable asset. I am speaking for the macro time frame, of course. When we look at the adaptation curve, we are facing a situation similar to the adaptation of the internet. It is clear that adaptation will continue rapidly when we consider the world population, the number of Bitcoin users, and the number of internet users shown in the image. I evaluate these independently of the price.
It is possible to see that the number of users is increasing. As of 2017, a considerable group of people had heard of cryptocurrencies. Before the DeFi craze in 2020, cryptocurrencies were already adopted. Today, Bitcoin is well known to everyone, especially in the financial industry. In the years to come, there are times when everyone will start using this new technology, beyond just hearing about it. Perhaps in 10 years, half of the world’s population will own Bitcoin.
2-Emotionalism
The Emotional Approaches of Market Participants
In my opinion, the most crucial feature of the cryptocurrency market is that most of the investors are inexperienced and young people. Additionally, the margin and futures markets, which are easily accessible, can already bring the investor to the brink of bankruptcy within days, even hours, in the already excessively volatile market. Excessive ups and downs are based on both emotionalism and the use of an uncontrollable leverage system.
You know those who hate Bitcoin, they always complain about how much it has fallen. I think these people serve the global monetary system. The famous investor Warren Buffet’s hatred of Bitcoin is well known in the investment community. He constantly says that Bitcoin’s intrinsic value does not exist, especially since he is the father of fundamental analysis. However, these investors ignore dramatic declines in Nasdaq shares or S&P500 shares. Facebook shares, which is one of the world’s largest companies, fell by 76% under the new name, META. Similarly, such declines are normal in other shares as well. They think that fundamentally companies create revenue and therefore companies have intrinsic value.
Understanding Bitcoin without Emotion
When we approach it fundamentally, Bitcoin continues to work. Blocks continue to be produced, and the reward given to miners decreases every four years due to halving. Let’s also consider that there is an unlimited supply of American dollars against a limited asset like Bitcoin. I can explain so many things about Bitcoin. I am aware that there is a large community that thinks Bitcoin’s intrinsic value does not exist. I will save this topic for another article since I cannot finish listing the problems it solves. However, I will share a website that briefly dismisses all the attacks. https://casebitcoin.com/critiques, 12 critiques are answered with plain answers on this site. I recommend you read it. If we educate ourselves enough about Bitcoin, we will not need to doubt when making investments.
Although I structured my article on the rise of cryptocurrencies, if you notice, I am only writing about Bitcoin specifically. Because Bitcoin and altcoins are fundamentally completely separate. I believe that Bitcoin will definitely be successful…
3-Market Cycles
When we look at the history of American stock markets, the S&P 500 index is an indicator for us to analyze the remaining years, even if it does not show us everything properly. As can be clearly seen in the chart, bull markets last longer and their returns are on average higher. The market’s decline and rise follow each other cyclically. Unlimited money printing will always drive up the prices of all assets. Similarly, as a result, inflation, like an invisible tax, will take everyone’s purchasing power out of their pockets, officially or unofficially.
At the moment, no one can know where we are in the cycle. However, what we do know is that all assets will appreciate in one way or another against money. While our goal is to question which one will appreciate the most, investing in various assets will always protect us psychologically.
4-Price Expectations
If you have read this far, you have understood that I expect an increase in the price of bitcoin. Although I try to look at many criteria, the first thing I look at is people’s investment psychology. I remember the market conditions when newcomers entered the market with the stock market in 2021. I also remember the market conditions in 2018-2019 very well. Without beating around the bush, let me say this. Bitcoin will hit new highs again in the next 1.5-2 years. Although it is difficult to predict the maximum level it will reach, based on Fibonacci correction levels, I think it will touch 1.618 at worst, which is 100k USD. My average estimate is 120k USD and my optimistic estimate is 150k USD. Based on my past experiences, I can say that optimistic predictions never come true. Taking profits in realistic price movements is a matter of life and death.