Bitcoin has experienced many ups and downs in its relatively short history, but only a few have been declared full-blown bull markets. The last one was in late 2021 when the cryptocurrency rose to a currency ATH of $69,000.
A massive price crash followed, dumping BTC to $20,000 due to multiple industry collapses as well as global global inflation and war in Europe.
As Bitcoin has made a major recovery from its effort below $16,000, the community has often speculated whether a new bull market has already begun or is just around the corner. In this thread, we’ll explore what the AI chatbot ChatGPT thinks about it.
While ChatGPT has had some BTC-related missteps, such as its all-time high price, the chatbot has provided some interesting insights into what could drive the next bull market. First of all, it highlighted global adoption, which consists of two parts, market and institutional, and we have combined them into one.
In terms of market adoption, ChatGPT believes that the price of the cryptocurrency will resume its upward trajectory once more businesses start accepting it as a payment method. This will help “create positive sentiment and drive demand.”
“Factors such as the integration of Bitcoin payment options by large companies or the launch of regulated Bitcoin investment vehicles could contribute to the emergence of a bull market.”
Institutional acceptance can also help boost the price of BTC. Recall that many companies such as MicroStrategy, MassMutual, Tesla, BlackRock and others have either bought a portion of the asset or otherwise engaged during the recent bull market. A repeat of this scenario could start another bull run.
AI chatbot also brought some technological developments that could be one of the reasons for another run. For example, the Bitcoin network is starting to see increased adoption and engagement after Tarpoot was upgraded to allow NFTs to be created on top of it.
So far, this has benefited miners in particular due to increased transaction volume and higher fee value. However, there are other factors and possibilities, according to ChatGPT.
“Significant advances in Bitcoin’s underlying technology or improvements in scalability, security or privacy features could generate excitement and attract more users and investors.”
While several countries have made initial attempts to regulate the cryptocurrency industry over the past few years, it still remains largely unregulated. In fact, some major nations such as China and the US have either formally banned the asset class or simply not provided detailed regulations that could help it thrive while protecting investors.
If this finally changes, ChatGPT believes that the price of BTC will start to head north once again.
“Clear and favorable regulations can provide a more stable environment for cryptocurrencies, increasing investor confidence. Positive regulatory developments, such as the recognition of Bitcoin as a legal form of payment or the creation of supportive frameworks for cryptocurrency businesses, can drive market growth.”
The US landscape has been particularly damaging over the past few months as the SEC, without providing clear guidelines on which crypto assets are securities, has gone after the likes of Coinbase, Binance, Kraken and others.
Economic and geopolitical factors
As mentioned above, the war that broke out in Europe caused pain for investors in various sectors, including crypto. In addition, rising inflation and central banks’ desperate attempts to combat it led to outflows from risky assets such as BTC.
But on a more macro scale, ChatGPT believes that a tough economic situation, currency devaluation or political upheaval could turn people to Bitcoin. Interest in the primary cryptocurrency is likely to increase as people look for “decentralized and non-government-controlled assets like Bitcoin.”
We saw similar developments in countries like Argentina and Turkey, where locals struggled with double- and even triple-digit inflation for some time. As such, ChatGPT echoed the words of legendary legacy investor Paul Tudor Jones III.
“In times of economic uncertainty, some investors may view bitcoin as a hedge against traditional financial systems that could drive up its price.”
Last but not least, the AI chatbot introduced half the events. Incorporated into the Bitcoin network since its inception in 2009, they occur every 210,000 blocks (about four years) and aim to reduce block rewards, thus reducing the rate at which new BTC is created.
The previous three semesters were followed by massive bull runs, and ChatGPT argued that the next one, expected in April next year, is likely to lead to the same price movement.
“Historically, halving events have coincided with bull markets, as a reduction in supply and a possible increase in demand have had a positive effect on the price of Bitcoin.”
If you want to find more information on what ChatGPT thinks will happen to BTC in the next semester and beyond, please check this article.
And if a new bull cycle does occur, you can prepare by checking out these tips.