The price of Bitcoin rose over $34,000 (£24,850) even as the premier cryptocurrency continued to surge higher. It has placed the gain at around $5,000 this year. One of the primary reasons behind the rise in price was an increase in interest among big investors looking to earn quick profits.
This increase in Bitcoin’s value comes after the crypto soared almost 300% in 2019, even as other cryptocurrencies also recorded a sharp rise.
Read on to learn more about the current rise in Bitcoin’s price and what the future holds for the cryptocurrency.
Bitcoin is one of the most popular and valuable digital currencies that has never failed to grab the attention of investors globally.
According to numerous market experts, BTC is expected to surpass the $100,000 mark this year.
However, the current rise in price can be attributed to crypto traders who have been betting on the cryptocurrency to become a mainstream method of payment.
Traders have also found the opportunity for earning quick profits as one of the other reasons behind the crypto’s popularity. Many investors see Bitcoin as the safe-haven for storing value amidst the pandemic situation. Much like gold, which usually rises during increased market volatility, BTC has also become a safe asset for storing value.
During the previous few years, investors witnessed a series of ups and downs after Bitcoin rose to almost 20,000 dollars in 2017 before declining by 80%.
The FCA (Financial Conduct Authority) had stated in October that crypto derivatives and other cryptos would not be sold to retail consumers.
The FCA further clarified that this was because the consumers were exposed to the risk of unexpected. The suffered sudden losses due to their crypto investments and that a ban would’ve saved them around £53m annually.
However, its supporters think that BTC is readily accepted at several companies, including Microsoft and Starbucks, as part of payments. Given the scenario, many analysts believe that the value of BTC would rise further even as the price of USD drops further.
As far as Bitcoin is concerned, it is traded in the same manner as the real currencies such as the pound sterling and the USD. In recent years, it has gained much support as a growing form of online payment, with companies such as PayPal being one of the latest adopters of digital currencies.
In October 2020, PayPal announced that it would accept cryptos on its payment platform, which further led to increased mass adoption of cryptocurrencies.
The California located payment portal stated that its latest service would enable clients to hold, buy, as well as sell cryptocurrencies directly through their PayPal accounts. As a result, account holders in the United States can now deal in cryptocurrencies such as BTC, Ethereum, Litecoin, and Bitcoin Cash. In addition to this, PayPal is also looking to extend its services to Venmo and other countries in 2021.
Following this, customers can now use their crypto holdings for paying for goods & services at twenty-six million merchants of PayPal’s worldwide from 2021. But, merchants won’t get their payments in virtual coins, with crypto payments being settled with fiat currencies like the USD.
PayPal has entered into a partnership with Paxos, a charted trust firm based in New York to offer crypto trading as well as custodial services.
However, cryptos have also been one of the most volatile investments in the past. The rising prices have led to the concerns that BTC will likely witness a price correction, similar to what happened three years ago after the value of the cryptocurrency collapsed following a bullish run.
During its rally, BTC had come closer to breaking the $20,000 mark in 2017, only to drop low and below $3,300. But Bitcoin passed the $19,000 level in November 2019 before witnessing a sharp drop yet again.
Bitcoin Future Price
When it comes to Bitcoin’s future prices, there is no denying the fact that its price has been soaring through 2020. Bitcoin’s prices went up four times from the beginning of 2020 and later completed its highest surge in December.
It got a boost after institutional investors started taking a keen interest in BTC, and Wall Street majors, including JP Morgan and Citibank, made bullish predictions about cryptocurrency. According to a report by Citibank, senior analysts believe that BTC has the potential of hitting a higher price of $318,000 by the end of 2021. Hence, many have labeled it as the twenty-first-century gold.
Bitcoin’s meteoric rise in 2020 was also accelerated owing to Britain’s Ruffer Investment Management that bought nearly $745 million worth of BTC, pushing the currency beyond the $20,000 mark for the very first time. Ruffer allocated 2.7percent of its funds to Bitcoin, using the profits earned from gold to purchase BTC.
This also placed BTC among leading global assets across the globe behind that of Facebook, Apple, as well as Tesla. Last year, cryptocurrencies witnessed a massive rally even as COVID-19 led lockdowns, as well as global recession fears, sent traders flocking for alternative assets. During the same period, many financial institutions backed cryptos and blockchain technology, which led to an increase in BTC’s price.
Also, Bitcoin continued to earn the reputation of digital gold for the entire 2020.
It witnessed huge support from investors, who worried that the government’s money-printing would devalue the traditional currencies, besides triggering inflation further.
Gold, on the other hand, reached an all-time new high last year, even as Bitcoin touched a series of fresh peaks. Many experts believe that both Bitcoin and gold has more to offer in the months to come.
This holds especially true if governments continue to pile up debts as well as central banks keep funding that borrowing from the backdoor, with help of zero rates of interest, quantitative easing, as well as manipulation of bond yield.
Nevertheless, Bitcoin will continue to dominate after a year full of ups and downs. The price of the cryptocurrency surged from below $4000 in March to an all-time and new high of over $28,000.
According to another report by JP Morgan, the price of Bitcoin is expected to go up ten-fold by the 2022 end. The company estimates that the BTC will reach $650,000 by next year. Many analysts at JP Morgan believe that the crypto would witness an increase in investments from leading financial institutions.
The report further clarified that alt currencies like bitcoin and gold were some of the biggest beneficiaries during the pandemic, thereby growing their investment assets by 27% and 227%.
Bitcoin to Gold Comparison
On the other hand, the Bitcoin to Gold rate of exchange touched an all-time new high level of 17.38 ounces/BTC.
As per a report, this new high level conveniently surpasses an all-time high level of 10.74 ounces/coin, recorded on the 1st January 2021. This new record implies that it would take almost seven additional ounces of gold or a sum that equals to $13,855, for anyone to acquire a full Bitcoin now as compared to what they would have spent on 1st January 2017.
The data further reveals that between 1st December and 1st January 2021, the rate of the exchange went up by almost 50%, i.e., from 10.52 ounces to 15.41 ounces that favored the digital currency further.
During that same period, gold stood nearly static, gaining around 4.3% from 1811.51 to 1898.60 dollars per ounce.
In 2020, Bitcoin witnessed increased institutional adoption that turned the market bullish. It led to an increase in Bitcoin purchases via intermediaries like GrayScale and MicroStrategy. On the other hand, the BTC halving, which happened in the month of May in 2020, resulted in greater scarcity.
As a result, with an increase in demand, as well as the rate at which new crypto coins were released into the market, the price of BTC skyrocketed due to pure interest.
Gold too gained a great deal of attention in 2020, especially after investors started searching for a safe-haven owing to the global economic downturn, triggered by the pandemic.
However, even after witnessing impressive gains, gold’s progress was still pale in comparison to that of BTC’s rise, which was nothing but meteoric.
Thus, there is no denying that the investors have been choosing Bitcoin over gold, owing to its efficiency, confirmed scarcity, and portability.
In the meantime, as the interest of the institutional investors continues to rise in Bitcoin, many Bitcoin users and non-Bitcoin users predict that its current price would increase further. Market analysts think that Bitcoin will set many more records in 2021 and beyond.
They further pointed out that neither gold nor bitcoin has any intrinsic value. However, Bitcoin has become a safe-haven and an ideal form of storing value just because it is portable. This indicates that BTC’s value would continue to rise and may even reach $200,000, and the interest may dissipate later.
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