Market correction risk
According to reports from Financial Associated Press, cryptocurrency billionaire Michael Novogratz stated on November 22 that after Bitcoin breaks $100,000, it might correct by 20% due to the presence of significant leverage in the system. Investors should prepare for this, as he believes Bitcoin's price could drop to around $80,000.
Long-term upward potential
On one hand, institutional investors are increasingly interested in Bitcoin, with more banks, companies, and funds participating, bringing substantial funds and higher recognition to the Bitcoin market, driving its price up. On the other hand, the Bitcoin halving mechanism reduces its supply and increases scarcity, further pushing prices up. Additionally, some analysts believe that Bitcoin, as a non-correlated asset, has the potential to diversify risk and enhance returns in investment portfolios. As more institutions incorporate it into their portfolios, demand for Bitcoin will further increase, driving prices up.
Regulatory impact
President Trump and his team are supportive of Bitcoin. Trump has stated a desire to establish a national strategic reserve for Bitcoin, and his allies have submitted related plans. Moreover, there are reports that the U.S. Congress may pass crypto legislation 'relatively quickly.' A clear and reasonable regulatory framework is expected to reduce policy uncertainty, enhance market confidence, attract more traditional financial institutions to participate, and accelerate capital inflows, but regulatory easing also faces challenges such as risk prevention.
Market differentiation and intensified competition
As the leader of the cryptocurrency market, Bitcoin's market share has increased during its rise, but as the market develops, other cryptocurrencies are also continuously innovating and evolving, leading to increasingly significant market differentiation. Additionally, traditional financial markets may also launch products or services similar to Bitcoin to compete with it, which will have some impact on Bitcoin's market share and price.
Investor sentiment and market volatility
The significant rise in Bitcoin's price has attracted the attention and participation of numerous investors, and investor sentiment will have a more pronounced impact on market volatility. When market sentiment is optimistic, investors may continue to chase prices higher, pushing Bitcoin's price further up; when market sentiment is pessimistic, investors may panic sell, leading to a sharp decline in Bitcoin's price.