Bitcoin is the biggest and most important cryptocurrency in the world, with the most significant market capitalization level and the most engagement from investors from all over the world. Although the performance recorded in 2024 has been somewhat lacking according to most investors, the fourth quarter remedied these issues by kickstarting an impressive rally that brought BTC to $90,000. This is a new record for digital gold, as it has never even approached these levels before. Binance data shows that traders have plenty of reasons to remain optimistic about the Bitcoin price in the future as well, with the possibility of a six-figure price being achieved by the end of the year seeming more realistic than ever right now.
But what exactly does the future hold for Bitcoin? Despite the infamous volatility and price fluctuations, or perhaps because of them, the crypto community is known for its love of predictions and estimations, some of which can become so influential that they end up as fundamental building blocks of trading strategies. In spite of its obvious success, some investors and analysts remain somewhat concerned regarding what the future has in store for BTC. Here are some of the factors that could weigh in quite heavily into the future of the king of crypto.
New tech
Technology is by far the fastest-developing sector in the world, and it only makes sense that it has the potential to cause significant disruptions across all marketplaces and niches. Bitcoin itself is based on the blockchain, a relatively new technology that has yet to reach the mainstream. But investors are mostly worried about the potential impact of other technologies on the Bitcoin environment. Quantum computing and artificial intelligence are the most pressing precisely because they are so new and have the ability to change society on a very wide scale. In fact, these two might be some of the most important advancements ever made in humanity’s history.
As the name suggests, quantum computing utilizes quantum mechanics in order to solve problems and issues in such a manner that is currently outside the realm of possibility, even for the most powerful and efficient computers in the world. Companies have spent billions in order to build these devices, and the earliest launch date for one of them is 2029. Some analysts are not concerned about Bitcoin’s future in this context, believing that digital gold has succeeded in adapting to new market requirements in the past and could do so again in the future if needed.
The concerns come from the fact that quantum computing could, theoretically, impact cryptographic systems, but that doesn’t just concern Bitcoin. Military encryptions, banking, and the internet itself could be in jeopardy during such a scenario. The risks associated with the widespread adoption of artificial intelligence, on the other hand, are mostly related to hacker attacks becoming more sophisticated and convincing. However, those using cold wallets are likely to remain safe even if AI is used to improve the efficiency of illicit digital activities.
Artificial intelligence could also be a good thing for Bitcoin, as it can be used to enhance and optimize the infrastructure of the trading environment.
Centralization
Bitcoin is a fundamentally decentralized environment, and this central feature has made it the favorite of investors from all over the world. The fact that it might not be able to keep this feature for much longer is a worrying possibility for many investors. Increasingly, there are discussions about the likelihood of the crypto space, and that of Bitcoin, in particular, becoming more centralized. The miners and whale investors are the ones that are most often part of this conversation. Nowadays, enterprise-level mining farms are the dominant force on the network, and they have ended up controlling the biggest portion of the hashrate.
The whales are the wealthy investors who own a large portion of Bitcoin. Since they have amassed a large portion of the coins that are currently in circulation, there have been discussions about their influence on the marketplace. When a small number of entities own the most significant amount of something, decentralization is more likely to start disappearing. The main concern about centralization is that it could lead to market manipulation. However, some analysts reject this scenario, believing that any kind of artificial intervention would likely be short-lived and wouldn’t end up impacting the marketplace to a significant degree.
Most of those who are convinced that centralization couldn’t hurt Bitcoin are confident that this is the case purely because of the resilience and flexibility that BTC has exhibited over the years. Moreover, researchers believe that simply owning larger portions of Bitcoin doesn’t inherently provide an investor with the ability to change the code and protocol of the network.
Mining rewards
Mining is the activity that keeps the crypto community alive and thriving, as it allows for the creation and launching of new coins, as well as the approval and validation of transactions. In order to have an incentive, miners receive rewards for their work. In the aftermath of the most recent halving that occurred in April, many miners had to adjust their strategies in order to remain profitable. By design, BTC is programmed to slice rewards in half every four years, arguably the most noteworthy event for the entire community, mainly since price appreciation typically occurs soon afterward.
Miners obtain their rewards not only from block subsidies but also from transaction fees. Some community members have expressed concerns about the potential inability of the rewards to continue supporting the security of Bitcoin someday in the future. In about two decades, the block subsidies will naturally be much smaller, and the network will be far more reliant on transaction fees, especially if adoption rates for Bitcoin continue to increase. These fees are expected to continue incentivizing the miners.
However, if they are not satisfied with the returns, it is also very likely that they will just shut down their machinery, something that is also not fundamentally negative, as it gives the overall hashrate a boost and increases profitability for other miners. As long as BTC retains its value, miners will also work to secure the network, and that is expected to happen for many years in the future.
Bitcoin is currently the most powerful cryptocurrency in the world, and it doesn’t seem likely that any altcoin will pose a real challenge for it anytime soon. It is natural for investors to wonder about the future of this asset, but most researchers believe there is no cause for concern.
