The third-largest price increase in the history of bitcoin continues. After the value has almost increased tenfold since March last year, the parallels with similar bull races in 2013 and 2017 are indisputable.
It is not so clear whether this recent historical record – $ 34,000 is the end of Bitcoin’s latest finding. Some analysts suggest this may be the beginning because the governments of many countries are now approving the use of bitcoins in transactions. Low fee platforms also serve as an incentive for investors to take advantage of such platforms.
“This number continues to grow as the market has never seemed more optimistic,” Paolo Arduino, CEO of Bitfinex cryptocurrency exchange, told The Independent. “Bitcoin technology and [cryptocurrencies] offer the building blocks of a new era of money that is almost impossible to decipher for cryptocurrencies. We see a very bright future for all bitcoin owners.” The price rally came earlier than many expected, despite market analysts forecasting sustained bullish gains since early last year.
Projections from May 2020 show that Bitcoin is still far from its peak, and at that point, the positive estimates were between $100,000 and $1 trillion. At that time, people did bitcoin halving which means digging cryptocurrencies digitally by 50 percent, increasing shortages.
“After the previous two halves, the price reached an all-time high in three to nine months,” Danny Scott of CoinCorner correctly predicted. “If we look at the stock and flow model, which assumes that scarcity drives value through supply and demand, we can expect to hit a region of $100,000 in the next 12 to 18 months.”
Raul Pal, a former hedge fund manager at Goldman Sachs, went a step further and stated, “In the next few years, the value of gold is expected to triple, I think Bitcoin could reach $1 million in the same period.”
Bitcoin’s Volatile History
On January 3, 2009, the Bitcoin Genesis block was released. It took the creator of the pseudonym Satoshi Nakamoto less than a year to fully describe cryptocurrency in an article entitled “Bitcoin: A Peer-to-Peer Electronic Monetary System.”
The first real Bitcoin deal took place on May 22, 2010. Laszlo Hanets bought two seals for 10,000 bitcoins – priced at $90 million today. Bitcoin soon became popular on the darknet.
Founded in 2011, Silk Road Market was the first of hundreds of websites offering illegal drugs and services for Bitcoin. On October 29, 2013, the very first Bitcoin ATM was installed in a coffee shop in Vancouver, Canada. The machine made it possible for people to exchange coins for money.
Another important market transformation event in 2020 was the coronavirus pandemic, which shattered stock markets and forced investors to seek safe havens to protect their assets. In times of geopolitical and economic uncertainty, funds usually flow into assets such as gold and silver.
However, due to the fixed supply of 21 million bitcoins, bitcoin is increasingly seen as a form of digital gold and reliable value. “We see this as a part of a sales strategy recommended by institutional investors and investment banks,” Eric Demuth, co-founder, and CEO of bitcoin broker Bitpanda told The Independent. “It justifies how important these assets are in the investment world. Today, the number of new retail customers entering the market every day is increasing dramatically … Bitcoin is becoming the gold of the 21st century.”
Reasons for the Record-Breaking Run of Bitcoin
Bitcoin’s record-breaking run in 2021 remains for many reasons. Let’s look at those reasons for a better understanding.
1. Cryptocurrency Will Get Taxing
Many governments are now taxing Bitcoin investments and this is considered a capital gain. As you conduct more Bitcoin transactions that exceed certain limits, you will have to pay taxes to the government of the country where you reside.
Government intervention in many parts of the world is encouraging investors to keep their Bitcoin investments stable. These facts cannot be ignored when trading Bitcoin.
2. Growing Popularity
The growing popularity of bitcoin will cause an explosion of bitcoin investments in 2021. The same growth pattern is expected to continue in 2021. Experts predict that bitcoin prices will break another growth record in the upcoming year.
Many of the world’s stock exchange traders now want bitcoin to invest, so there is no chance of negative growth in 2021. Rising prices are not the best time to resale.
3. Big Investors Will Show Their Interest
Investors are showing an interest in putting their money into bitcoins instead of other assets. This will create an impact on the Bitcoin prices. You have no better chance to make billions by investing your money in bitcoins.
However, market volatility is not the best part of Bitcoin trading. You can’t expect stable growth increases if you don’t factor in the volatility of the Bitcoin market while investing in Bitcoin.