How Can Bitcoin Hit $1 Million?

Trying to predict the value of Bitcoin in 2023 is challenging, to say the least, due to the unsettled nature of the cryptocurrency market. Nevertheless, some analysts are convinced Bitcoin will continue to experience growth and reach new milestones. Some go so far as to say that Bitcoin will hit $1 million. MicroStrategy co-founder Michael Saylor, whose Bitcoin holdings increased to 12,000 during the second quarter of 2023, is confident that the cryptocurrency will reach a decisive point: $1 million. It doesn’t seem impossible given Bitcoin’s historical performance, but Bitcoin would have to undergo some changes for the price tag to become a reality.

The Top Influential Factors on Bitcoin Price

The price of Bitcoin can fluctuate significantly over periods of time, and various factors can influence value, such as:

The Next Bitcoin Halving

Bitcoin halvings come to pass at regular intervals of four years, according to the pre-set rules in the code, to counteract inflation by maintaining scarcity. Mining rewards are reduced by half, resulting in fewer miners and less security for the network. Bitcoin miners use dedicated apparatus, and the power required to run the rigs is costing them tons. The next halving is set to take place in 2024. It could occur between February and June. Satoshi Nakamoto, Bitcoin’s alleged founder, reckoned that scarcity could create value, so he limited Bitcoin’s supply to 21 million. He prevented any single party from being capable of creating more Bitcoin.

The law of supply and demand states that if a product is in high demand but with a limited supply to meet this supply, the price will increase. In theory, the limited supply should increase the demand for Bitcoin and push up prices. Market analysts, as well as participants, presume that the upcoming halving will cause a dramatic Bitcoin price increase. More exactly, the reduced inflation rate will lead to much higher demand. After preceding halving events, the value of Bitcoin increased, but past performance is no guarantee of future results, meaning that Bitcoin’s price could increase or decrease.

Favorable Regulatory Environment

The advent of digital assets like Bitcoin is part of an extensive trend towards a more diverse financial market infrastructure. By its very nature, Bitcoin isn’t indebted to country borders or specific agencies within a government. It’s this exact nature that is problematic for policymakers who are used to definitions free from ambiguity or uncertainty. It’s up to those responsible for formulating and amending the policy to obtain macroeconomic impact data to create bespoke standards for cryptocurrencies (and stablecoins). Policymakers must work alongside the business and technology communities to get a better understanding of the possible economic impacts some regulatory models might engender.

Regulation is among the chief factors that impact Bitcoin price. In the United States, regulators haven’t yet decided if cryptocurrency should be treated as a security or a commodity. As a matter of fact, for years, they haven’t agreed on what to do on this matter. It appears regulators have found the answer. In June this year, the US Securities and Exchange Commission filed enforcement actions against some of the world’s biggest cryptocurrency exchanges, accusing the industry giants of several violations, including mishandling customer funds. It’s not all bad news, though. The United Kingdom’s economic and finance ministry affirmed it wouldn’t be adopting proposals to regulate the trading of cryptocurrencies like Bitcoin as gambling.

Wider Acceptance as A Payment Method

As a form of digital currency, Bitcoin attempts to eliminate the need for central authorities such as banks and governments. The emphasis is on the decentralization of control over the movement of the funds and complete protection against theft. Bitcoin can be used to purchase goods and services. To make a Bitcoin payment, a person must have a cryptocurrency wallet and the Bitcoin wallet address of the merchant. The problem is that a Bitcoin transaction can’t be reversed, which means it can be refunded just by the person who received the funds. The likelihood of sending Bitcoin to an incorrect or invalid address is high.

According to Deloitte, since its introduction in 2008, over 220 million people have been using cryptocurrency, using it to pay for many goods and services. Businesses are responding in a way that’s appropriate for the situation: they’re making cryptocurrency like Bitcoin a viable payment option. Although incorporating a new payment method requires time and resources, many have made the move. Unfortunately, the adoption of cryptocurrency has been slow due to various challenges, including but not limited to volatility, uncertainty regarding taxation, and scalability issues. The interest regular individuals and business leaders have demonstrated in cryptocurrency suggests it’s possible to overcome the pitfalls in adoption.

One Day, Bitcoin Could Be Worth More Than $1 Million

Bitcoin could reach the price of $1 million. It’s not impossible, but it depends on the factors discussed above. Nonetheless, for Bitcoin to get to that level, it would have to increase by 4000% in just a few years, and the market capitalization of Bitcoin would have to grow to approximately $20 trillion. It goes without saying that this would bring about a huge change in how wealth is stored. No one knows what the future holds, so we’ll have to wait and see. In the meantime, it might make sense to HODL your coins despite the fear of missing out induced by bullish optimism. You’ve just survived the longest bear market ever. For better or worse, you’re a veteran.