BITCOIN NEWS: WILL BITCOIN CROSS $60,000 AGAIN?
Since its creation in January 2009, the digital cryptocurrency Bitcoin has been through many phases of rise and crash. From its value of $0 and only few crypto enthusiast that would mine it out of curiosity, to its current value of more than $50,000 and many miners worldwide, this asset has come a long way. Bitcoin is a Blockchain-based digital currency and also a far more trustworthy and transparent payment system as compared to the traditional financial systems. With a market capitalization of around $600 billion as of February 2021, this game changing currency is considered as one of the most successful digital currencies ever created.
BUBBLE AND CRASH OF BITCOIN
Following the financial collapse in 2008, Bitcoin was designed with the aim to act as a medium to assist in daily transactions, and also, as an alternative to the traditional banking infrastructure. However, instead of serving its original purpose, Bitcoin soon gained popularity as a store of value and a shield against inflation.
This change in narrative attracted many speculators, who in the quest to earn quick profits, started betting on increasing prices without much strategies or facts. This caused price fluctuations of Bitcoin and a much volatile trading history.
In addition to the inexperienced investors and traders, the Bitcoin ecosystem was plagued with multiple fraudsters and scams to an absolute absence of regulations that further added to its volatility. Due to these factors, Bitcoin has a long history of several bubbles and crashes over the past decade.
The first price surge occurred in 2011 when Bitcoin’s price jumped from $1 in April 2011 to a peak of $32 in June 2011, a gain of 3200% within three short months. This tremendous ascent in price was followed by a sharp recession when Bitcoin dropped to $2 per coin in November 2011. The following year witnessed a marginal improvement and the price rose from $4.80 in May 2012 to $13.20 in August 2012.
The year 2013 proved to be a decisive year where Bitcoin investors witnessed two short lasting price bubbles. The digital asset started the year off with $13.40. The first price bubble occurred in April 2013 when bitcoin rose to $220. Unfortunately, it was followed by an equal deceleration with Bitcoin trading at $70 in mid-April. Later, in early October the cryptocurrency spiked to $123.20 and by December accelerated to $1156.10. But fell to $760 after three days. These rapid changes hinted at the start of a two-year slump in Bitcoin’s price and it started off 2015 with as low as $315 per coin.
The bubble and crash in Bitcoin’s price continued till 2016 until the fifth price bubble hit the cryptocurrency in 2017. The Bitcoin reached a record trading of $1,000 early in the year. After two brief months of decline, the Bitcoin saw a huge surge in price from $975.70 in March 2017 to $20,089 in December 2017.
However, after a minor blip, in 2018 its value dropped and it settled at $5,000 at the beginning of 2020.
2020, THE YEAR OF BITCOIN BOOM
Bitcoin finally gained its due share of recognition in 2020. The crypto coin started the year at $7,200 and ended it at $18,350.
Below are the two main events that contributed to the immense rally in the trading of Bitcoin.
- GLOBAL PANDEMIC: The facts and figures reflect that when the lockdowns across the globe crushed the economies, Bitcoin was the only financial asset that started flourishing. This can be attributed to the fact that low interest rates and economic instability due to Covid-19, encouraged investors to make use of this asset to secure their wealth beyond the usual asset classes of properties, fixed income and cash. This not only attracted many retail investors but also institutional investors such as Microstrategy, Square Corp etc. also converted their assets into Bitcoin which resulted in the all-time highest Bitcoin price.
- BITCOIN HALVING EVENT: Bitcoin Halving happens once every four years. This aims to cut the reward for Bitcoin Mining to half. In 2020, third Bitcoin Halving happened which reduced the reward of mining to 6.25 BTC from 12.5 BTC. This process can be considered to be a mere stunt to trigger the demand for Bitcoin and hence it’s price. This was clearly reflected in the closing price of Bitcoin for 2020.
After a steady increase in Oct 2020, Bitcoin has touched new heights – crossed $20,000 in Dec 2020. Kick started January 2021 at $40,000; hit $50,000 in Feb 2021. On 13 March 2021, Bitcoin exceeded $61,000 for the first time in its history and is currently trading at around
$58,033 globally as in April 2021.
WILL BITCOIN REALLY CROSS $60,000 AGAIN?
The above mentioned trading history of Bitcoin reflects tremendous ups and down. These, as stated earlier, can be due to mishandling of the digital asset by retail investors, traders and lack of regulations to monitor the flow of Bitcoin. It can also be attributed to the lack of acceptance by many as a currency. Some famous business tycoons such as Jack Ma and Jamie Dimon have called it a “bubble” and a “fraud”, respectively. This led to reluctance in the general public to invest in Bitcoin.
But with the passage of time, this crypto coin which was once considered as mysterious by many has evolved in terms of both value and popularity. With the pandemic hitting the world and some giant financial institutions like PayPal, Visa, JP Morgan etc. finally offering crypto services, more people are now heavily investing in Bitcoin.
Despite the past volatile trading history, bitcoin has shown increase in value, especially in the past year. This can be attributed to two factors:
- TRUST: Earlier, some major concerns regarding Bitcoin were its unexplored security features, functionality and the fact whether Blockchain technology is safe or not. Almost a decade from its emergence, these questions have been fully investigated and answered. This instilled a sense of security amongst the investors.
- GLOBAL TRENDS: The investment of many business tycoon in Bitcoin, attracted many investors.
TESLA TO ACCEPT BITCOIN AS PAYMENT METHOD:
Earlier this year in March 24th, Elon Musk, Chief Executive officer of Electric Car manufacturing company Tesla, announced through Twitter that people living in U.S. can now buy Tesla cars through Bitcoin. Not only that it’s been reported that Tesla invested $1.5 billion in bitcoin this year and has made nearly $1 billion in profit.
This official announcement by Elon Musk raised Bitcoin’s value above one trillion dollars and the cryptocurrency reached a price above $58,000. Since Saturday, February 21, Bitcoin (BTC) began to show values that pointed to the upside. Tesla’s investment, along with those of MasterCard and BNY Mellon, caused its market value to exceed $ 1 trillion for the first time that day. All these factors when combined together reflect a bright future for Bitcoin. Economists are also predicting a surge in the price of the cryptocurrency. With the business executives investing in Bitcoin, one can safely predict Bitcoin to cross $60,000 at least once in the next few years
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