BT Series Bitcoin (BTC-USD) has experienced an epic decline since hitting $64,000 nearly a year ago. The decline from peak to low was massive, about 76%. Many other digital assets have been brutalized during this bear market phase, dropping 90% or more in recent times. Bitcoin got ahead of itself and when the Fed started to tighten, Bitcoin began to deflate. Moreover, Bitcoin may soon go lower and reach $10-12K, which is my long-term buying target. However, Bitcoin is far from worthless and the cryptocurrency segment is still alive and well. We have a huge market for Bitcoin and other functional and transactional digital assets. Although sentiment is weak at the moment, confidence should return to the cryptocurrency market and the price of Bitcoin should rise significantly in the coming years. Bitcoin 3-Year Chart Bitcoin chart (coinmarketcap.com) After hitting a double peak in 2021, the price of Bitcoin has returned to its pre-crash levels in 2020. The run of 2021 was phenomenal, but the crash of 2022 was epic. So what’s next for Bitcoin? We can expect a similar phenomenon that we have seen in previous times. While sentiment remains weak, we may see more downside in the near term. However, as sentiment improves, the price action should stabilize and Bitcoin could rise further in the coming years. Previous Cycles Set to Repeat BTC: Long-term chart BTC chart long-term (coinmarketcap.com) The past decade has seen several major Bitcoin peaks. In late 2013, Bitcoin reached about $1,200. This initial peak was followed by an 85% decline, which brought the price of BTC down to around $200. The next prominent peak occurred at the end of 2017 around $19,500. This peak was followed by an 82% drop that dropped BTC to around $3,500 before a subsequent recovery and bull market began. Bitcoin has already hit lows around $15,000 in this bear market, and a drop to the $10-12K range would equate to an 80-85% decline in a traditional bear market for Bitcoin. Therefore, $10,000-$12,000 may be the ideal buying point for Bitcoin, but even around current levels, Bitcoin is a good buy because its price will go much higher in the coming years. Bitcoin: Not Alone – Another Cryptocurrency Performs Bitcoin Dominance (coinmarketcap.com) While Bitcoin’s dominance is nowhere near pre-2017 levels, its market cap still accounts for about 38% of the entire cryptocurrency complex. Additionally, considering Ethereum’s (ETH-USD) share of 18%, the top two assets account for roughly 56% of the $820 billion of 22,000 crypto assets. There are many assets in the crypto space and many “coins” offer significant functionality potential. We see many promising projects developing and trading on more than 5,000 exchanges. Therefore, the digital asset market is alive and well. Although going through a mild downturn, Bitcoin and other top digital assets should recover and advance significantly in the coming years. Top Coins: Bitcoin to Top: 76% Ethereum: 78% Litecoin (LTC-USD): 87% Solana (SOL-USD): 95% ChainLink (LINK-USD): 88% Bitcoin Cash (BCH-USD) . ): 93% ZCash USD (ZEC-USD): 88% The Takeaway We have seen 75-95% declines from 2021 highs in most major cryptocurrencies. Therefore, the near-term downside is now likely to be limited. Moreover, as the market stabilizes and sentiment improves, significantly higher prices will be realized in the coming years. Significant Future Potential You might be surprised at how many large companies are now accepting Bitcoin and other cryptocurrencies. Some of the most important corporations include Microsoft, PayPal, Whole Foods, Overstock, Starbucks and many more. Bitcoin and other transactional coins are still in the early stages of adoption. The trajectory of mass adoption should drive prices up significantly as the industry continues to expand and evolve. As of November 2022, approximately 85 million people have created unique Bitcoin wallets on Blockchain.com. That’s nearly 6 million more users than a year ago, and nearly 42 million more than in 2019 (a 102% increase). The Bottom Line Despite the temporary slowdown effect and subsequent bear market phase, Bitcoin is a valuable asset. I don’t need to remind most readers that Bitcoin only has a supply of 21 million. About 92% of all bitcoins have already been mined. Therefore, we are dealing with an asset that has minimal supply, but demand can expand exponentially, causing prices to rise dramatically in the coming years. The digital asset segment fell significantly during this bear market. Although the final bottom was not reached, we came very close. Improved sentiment, increased popularity, higher adoption, limited supply, increased demand, historical trends, speculation, and other macroeconomic elements should drive Bitcoin’s price significantly higher in the coming years. My long-term buy range remains $10-12K for Bitcoin, with a price target of $100-150K in the next bull market phase. Bitcoin Risks Bitcoin remains a volatile asset and is not suitable for everyone. Numerous factors such as increased government regulation, hacking, functionality issues (such as speed, cost, and scale), fraudulent activity, and other malicious elements can negatively impact Bitcoin’s popularity/share and affect its price. Therefore, for investors with a low to moderate risk tolerance, a position size of 3-5% of total portfolio holdings may be appropriate. A position size of 10% of portfolio holdings may be appropriate for investors with a high risk tolerance. It remains to be seen what the future holds for Bitcoin. A digital asset may be worth more now than it will be in a few years, or it may be worth less in the long run if harmful elements prevail.