Bitcoin, a cryptocurrency or digital currency offers low transaction fees than traditional and is not like government-issued currencies but rather operated by a decentralized authority. It is not in physical form and nor valued as a commodity, also people have transparent access to balances that are kept on a public ledger which is verified by computing power.
Each Bitcoin is a computer file stored in a smartphone or computer as digital wallet app. People can send Bitcoins to each other through digital wallet, and every single transaction is recorded in a public list called the blockchain. This allows to trace the history of Bitcoins in order to restrict people from spending the coins they do not own, undoing the transactions.
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Is bitcoin worth investing in?
Bitcoin has moved from 2020, one of the biggest years for it in the history, the price surged, reclaiming its 2017 (when bitcoin broke $20,000 as value quickly fell) all-time highs after getting support from worlds’ biggest investors and from Wall Street. The bitcoin community is looking forward to developments in 2021—with the launch of US cryptocurrency regulations (potentially industry defining) and Facebook Bitcoin-inspired cryptocurrency. The 2020 year ending with the close of $30,000 depicted that such dramatic decline won’t happen again due to bull run feels, as institutional investors are piling into crypto.
Cryptocurrencies and bitcoins have mounted from nothing to $560 billion added over 300% in market capitalization over the past 12 years, and the year 2021 centers around incessant improvements in continuity between crypto and traditional markets. Bitcoin has strengthen its reputation throughout 2020 as digital gold with investors who are wary massive government money-printing authorities and will devalue traditional currencies and trigger a wave of inflation. Gold has reached peaks in 2020 and bitcoin has set new all time high, more than multiplying in the second half of the year.
It is argued that there is a lot to come from both bitcoin and gold, particularly if government continue taking debts and central banks put their best to fund that borrowing through zero interest rate, quantitative easing and bond yield manipulation, as comparing to the scarcity value relative to cash. There is 2% gold per year supply growth and bitcoin’s fixed supply of 21 million tokens.
“We are in a flood of credit and money“
Currently, Bitcoin is in a bull market cycle with six-figure price predictions per Bitcoin and is accelerating central bank monetary expansion as the main driver. Bitcoin’s rising popularity is expected to create further divergence between those who are suspicious of bitcoin value and those who consider it as a sound investment. Few consider, that both bitcoin and gold don’t hold any intrinsic value, as they do not produce any cash.
10 significant Bitcoin price predictions for 2021 are;
Possibility of big pullback
A survey by Finder.com shows significant amount of disagreement related to market crash in 2021. 52% warned that BTC would lose more than half of its value in a short time as has happened in 2011, 2013 (twice) and 2017. So why would it change this time?
Bull run could last for long
In spite of the historical precedence, it is expected that Bitcoin will head for a protracted bull run with BTC continue to flow until the second half of 2021, while 10% believe investors will be reserving their gains until 2024.
BTC will threaten the gold
A debate is centered on whether Bitcoin will move towards constant stealing the market share away from gold. Today, analyst think that millennials are preferring cryptocurrencies more as a safe haven asset than that of the precious metal’s as a store of value. Indeed, Winklevoss Twins Ride Bitcoin Surge to become billionaire having set out the case for BTC hitting $500,000.
BTC will hit zero, Naysayers warn
There are many who is annoyed at Bitcoin’s performance. Anton Wahlman is one of them who says that BTC worth is absurd — placing a harsh price target of zero. Bitcoin and similar cryptocurrencies are those where people don’t know to which extent, they can make the argument due to its unexpectedness.
BTC may double again
As per the Digital Coin Price’s predictions, the Bitcoin price will peak in 2023 at $130,000. For the next two years, the price will surge, before falling again in the run up to 2026. The following yearly highs the bitcoin will go are;
* Bitcoin price is expected to hit $121,871.73 in the year 2022
* The price is expected to reach all time high at $130.315.66 in the year 2023
* The price is expected to be worth $90,010.93 in the year 2024
* The price is expected to reach $89,109.01 in the year 2025
* The price is expected to decrease $63,387.60 in 2026
The forecast of Stock-to-flow will be right
The stock-to-flow forecast is one of the metrics which has resulted in derision in recent months and was produced by PlanB. Currently, the analyst believes that Bitcoin is on track which will exceed $100,000 by December 2021 concentrating a push of six figures.
A beginning, the Big banks
After years of doubt, Wall Street is starting to warm to Bitcoin. An analysis from technicians at Citibank in November suggested that Bitcoin by December 2021 can surge to $318,315.72 which is just 90% of current levels.
Regulation will be a sharp focus
Government and central banks may closely look at Bitcoin’s surging market cap. As JPMorgan CEO, Jamie Dimon recently noted, the U.S. can introduce new curbs on BTC if the cryptocurrency gets any bigger, whereas possibility is anticipated that altcoins will develop a more striking place for growth than BTC, or central banks may launch their own digital currencies as the space becomes competitive.
The Cryptocurrency will be taxed
If you own Bitcoin, then know the time is near time to get tax affairs in order — particularly if you are from UK or US as the Internal Revenue Service have started to step up action against those who doesn’t declare their crypto holdings. One will be liable to pay capital gains as selling Bitcoin for more at what it is bought for, is a taxable event.
BTC will add zeros
Mike McGlone, Bloomberg Intelligence’s is another who is optimistic about prospects of Bitcoin in 2021. According to him, $50,000 is a good 2021 target resistance which will result in an overall market cap of $1 trillion relating to what will happen in market crash event. He further states that $10,000 aids as critical support for Bitcoin given how cryptocurrency has tried to break through this zone in 2020.
Price Prediction Forecast
|
Year |
High |
Low |
|
2021 |
$120,000 |
$21,400 |
|
2022 |
$156,000 |
$45,000 |
|
2023 |
$225,000 |
$60,000 |
|
2025 |
$450,000 |
$85,000 |
Note: It is potential high and low of Bitcoin price prediction forecasts in 2021, 2022, 2023 and 2025 provided by industry experts and technical analysts.
Factors affecting the BTC?
- Media Coverage: It drums up investors interest in digital currency, cryptocurrency. When the payments network PayPal announced at the end of 2020, that it will allow people to store BTC in their PayPal wallets, giving a go ahead to many would-be investors that they may need to add BTC to their portfolio.
- Market Competition: When high-ranking cryptocurrencies or new altcoins enter the market, it attracts high levels of investor interest, resulting in traders to focus on alternative forms of crypto. The Bitcoin hard-fork is a third-generation cryptocurrency which people consider as superior to BTC, as designed to solve issues which plague the king of cryptocurrency. Though, Bitcoin is more resilient to market competition and still has a status of digital gold.
- Supply and Demand: Supply and demand of Bitcoin affects its price. It is driven up when the new token demand is higher than the supply which may happen as the consequence of each Bitcoin halving, resulting in few investors to consider it as a form of artificial inflation. It might become less volatile once the Bitcoin has maximum supply.
- Cryptocurrency Regulations: Throughout the world, the digital currency has been largely unregulated but due to higher governmental pressure, it is somewhat getting controlled generating a long-term uncertainty. The new regulations may lower its demand which might be a m result of future taxation measures.
