The rise of Bitcoin: Will it Touch 100K In 2021

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The past year has been one of its kind – a global pandemic, market uncertainty, countrywide lockdowns, travel restrictions, etc. Yet, we witnessed one financial asset on the rise. The cryptocurrency market has been driven higher in the last month as Bitcoin capitalized on the recent Tesla investment with a rally to highs at $56,000. The price of BTC is now pulling back from the explosive surge as “whale” investors take profits, but the move lower has attracted dip buyers at the $44,000 level. Putting short-term volatility aside and looking at the long run, analysts state that it could touch $100,000  next year.

In 2009-10, the first-ever digital currency, Bitcoin, was introduced as an alternative to the current financial system’s loopholes. During the time, Bitcoin was valued at $0, and just a few crypto nerds would mine them as a collectible. After 2010 – The Bitcoin Pizza Transaction happened, people looked at it as a currency that could be used to purchase goods and services.

By 2014-15, Bitcoin gained more popularity and touched $1,000. After the second Bitcoin Halving event took place, the coin rose significantly in value to $19,700. However, there was a minor blip, and after 2018, its value dropped and its price settled at about $5,070 at the start of 2020. Since then, it has been a year-long rally amid two significant events.

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The global pandemic: most people sought bitcoin as a hedge against the shaky economic crisis caused by the spread of Covid-19. Even institutional investors such as Microstrategy, Tesla, Square Corp, etc., resorted their cash reserves into Bitcoin, stating that it was a good store of value against inflation.

Third Bitcoin Halving event: Halving happens once in four years, where the rewards of Bitcoin Mining are cut down by half. After the third halving, the mining prize, 12.5 BTC, was reduced to 6.25 BTC in May 2020. It reduced the coins in circulation significantly, thus triggering a higher demand. After a steady rally was set off in Oct 2020, the value of Bitcoin has touched new heights.

Is it too late to invest in Bitcoin?

Although it would have been ideal for an investor to have entered the investment space earlier in 2020, it does not mean that it is now too late to invest in Bitcoin, provided that you invest what you can afford.
There may be dips in its value from time to time, but even a small investment you make in Bitcoin today could return manifold in the long run.

Could Bitcoin really hit $100,000?

Early on, major concerns revolving around Bitcoin were, ‘Will it get hacked?’, ‘Is decentralization a truly workable solution’, ‘will halving break the system?’ etc. Now a decade down the road, many of these issues have been answered. Bitcoin works on reliable technology, and it does not break. The digital currency that was once viewed as mysterious by many in the past has now exploded in both value and popularity. It has mainly become mainstream – Giant financial institutions like Paypal, Visa, JP Morgan, etc., are offering crypto services, and more retail investors are interested in purchasing Bitcoin now more than ever.

At the same time, the world is now witnessing Bitcoin being associated with more institutional investors like Tesla, Microstrategy, etc. Most institutions are now considering converting their cash reserves into Bitcoin as a hedge against financial crises. many other cryptos have joined the race, which diverts some retail investors’ interest away from it. Nevertheless, it remains the most significant cryptocurrency with a total market capitalization of $1.15 trillion, higher than the combined market cap of the world’s three largest banks, J.P Morgan, Bank of America, and The Industrial and Commercial Bank of China.

“Analysts believe that if the trend continues, Bitcoin might hit $100k by the end of 2021. The predictions are based on the stock-flow-model – 93% correlation to Bitcoin price. This model is used to measure the scarcity of commodities such as gold.”

POLYPOLITICSPARTY.COM

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