Why is Bitcoin (BTC) so Cheap?
A recent survey by Finder.UK queried 42 crypto experts, and 61% of these argued that Bitcoin is grossly undervalued, which begs the question, why is Bitcoin so cheap?
The answer to this is that Bitcoin is only cheap today because the recent price crash experienced in May 2021 not only disrupted further value appreciation but also wiped most of the gains made in the year to date. Were it not for the price crash, most crypto analysts had predicted that the lead cryptocurrency would rise and aim for $100K before the end of the year.
But the fact that BTC is cheap does not mean that the coin is of low value, and neither does it imply the coin is not worth investing in. Rather, it implies that the crypto community is confident that it could be worth way more than its current price.
Bitcoin remains the largest and most valuable cryptocurrency with a market capitalization exceeding $922 billion. It is the oldest and the dominant crypto coin seeing that it currently makes up more than 44% of the total crypto market capitalization.
In this Bitcoin investing guide, we will explore why Bitcoin is cheap, telling you what it could be worth and if it would a worth investing in today.
First, though, we look at its current price and immediate price history.
Bitcoin (BTC) Price History
For this section, we will be using Bitcoin price data from CoinMarketCap to illustrate why Bitcoin prices have remained rather low, despite being the oldest and most popular cryptocurrency.
No one really knows when the first Bitcoin was sold or how much it fetched, but CoinMarketCap started tracking BTC price action on 29th April 2013, and it ended that day trading at $144. By this time, Bitcoin had already gone through its first-ever halving event, in 2012, which preceded the 2013 BTC price rally in the second half of 2013 that pushed its prices above $1,000 for the first time.
Its lowest price ever on record is $65.53 set on 3rd June 2013. Since then, it has grown its value by more than 75,000% to trade around $48,800 today. Bitcoin prices have also rallied twice since, in 2017 to reach $20,000 after the 2016 halving event and in 2021 to reach its current all-time high of $68,863 after the 2020 halving event.
From a market capitalization of $0 during its launch, the Bitcoin Network at one time pushed its peak valuation close to $1.2 Trillion. Today, its market cap stands at $912 Billion with a circulating supply of 18.79 Million BTC coins.
Though these figures may seem humongous, and without negating the fact that Bitcoin still is the largest cryptocurrency project, the crypto community feels that BTC is hugely underpriced.
So why do Bitcoin investors, crypto market analysts, and the larger crypto community feel that Bitcoin is cheap?
Why is Bitcoin (BTC) so Cheap?
There are plenty of reasons that can be attributed to Bitcoin’s relatively cheap valuation, especially the most recent price crash, government interference, slow penetration into the public, and opposition from the banking world.
Volatile price crashes have played the biggest role in keeping Bitcoin prices at a minimum. In 2013, for instance, Bitcoin’s first ever price rally was quickly followed by an unprecedented but slow value loss that had the lead crypto prices fall below $200 by January 2015. The scenario would repeat itself in 2018 when BTC prices crashed to around $3,000 after a $20,000 peak months earlier. Again, in 2021, BTC prices crashed below $29,000, three months after setting an all-time high of $64,000.
Interestingly, all of Bitcoin's price crashes that have so often disrupted its price rallies and arrested further price climb can be traced back to interference from governments and state-backed finance industry regulators.
In 2013, for instance, Bitcoin prices crashed after China banned BTC in the country and in 2018, it crashed to a large part due to China’s crackdown on crypto exchanges. In 2021, it crashed after China reiterated its BTC ban and expelled BTC miners within its borders, as well as due to rumours about proposed crypto regulation by the Joe Biden administration.
These, plus the active resistance and misinformation about the crypto coin spread by the global finance industry players, have stood in the way of Bitcoin reaching its potential. They have kept disrupting what would have been a decade-long bull run and kept its prices struggling at relatively low prices.
So, we need to ask if this then implies that now is the best time to buy, in anticipation of a future price improvement.
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Should I Buy Bitcoin (BTC) While it is Still Cheap?
Yes, primarily because Bitcoin has proven to be one of the most resilient cryptocurrencies to date. Thrice its prices have crashed, thrice they have bounced back and went on to set a new all-time high. At the moment, the coin is working towards getting back to the pre-crash prices, which makes now a good time to invest in the coin with the hope of riding this recovery phase to profitability.
Additionally, crypto analysts are confident that Bitcoin prices will continue rising in the foreseeable future. They have even come up with highly optimistic Bitcoin price predictions that place Bitcoin’s value in the next 5 years at between $100,000 and $1 Million.
In backing up these generous price forecasts, most of these crypto experts cite continued acceptance/adoption of Bitcoins as a store of value and medium of exchange, the coming in of institutional investors, endorsements by governments, upcoming upgrades to the Bitcoin network, and the August 2024 Bitcoin halving.
Is Bitcoin (BTC) Worth Buying?
A significant percentage of crypto experts you will come across today will tell you that Bitcoin is worth investing in because it has all the features of a good investment. For starters, it has outperformed virtually all other investments to post the highest ROI in the last decade. It is also poised to post an even higher ROI moving forward as crypto experts believe its prices will rise eternally.
Bitcoin is also worth investing in because of its resilience and ability to shake off even the most devastating price crashes. Its price history has proved to us that with time, it will always weather any blockade thrown its way, and that includes opposition from even the most powerful governments in the land.
Read also: Pros and Cons of Investing in Bitcoin
Will Bitcoin (BTC) Bounce Back?
Interestingly, Bitcoin always bounces back. Countless times it has crashed, and in each of these cases, it has bounced back stronger and rose above the prior price levels, as evidenced by the numerous ridges shaping its price chart.
Moving forward, a majority of crypto experts and Bitcoin analysts are confident that Bitcoin price will rebound and break above its current all-time high before the end of the year. They then predict that it will rise steadily to reach $500k within the next 5 years before setting aim for a price above $1 Million by the turn of the decade.
Conclusion: Why is Bitcoin (BTC) Cheap?
Bitcoin is currently cheap because of a number of factors that have kept disrupting its uptrend in the last decade, chief among them being government interference. This has led to multiple price crashes that threw it off course and saw it trade at relatively low prices. The silver lining to this, according to most experts, is that it presents Bitcoin enthusiasts with a chance to buy into the lead crypto while it is lowly priced.
Further, analysts and current Bitcoin investors are convinced that crypto prices will continue soaring into the foreseeable future. They believe that just like in all other past cases of Bitcoin price crashes, the lead crypto’s prices will bounce back and rise towards $500k in the next five years and $1 Million in the next ten years, which again makes today a good time to buy.
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