What will be value of Bitcoin in 2021?
The past few weeks for Bitcoin have been very good. It gains value dynamically and steadily. It recently broke the historic makisma established during the last boom in the cryptocurrency market at the turn of 2017 and 2018, reaching a value of over 27,000. dollars (over PLN 100 thousand) per item. Now, most Bitcoin and other cryptocurrency enthusiasts ask themselves one key question. How much will Bitcoin reach in 2021 and will its price continue to rise? Today we will try to answer them.
What is Bitcoin and why does it cost so much?
Bitcoin was created after the last financial crisis of 2007-2009. The intention of the creator (creators?), Satoshi Nakamot, was to be an alternative to classical money and free humanity from the classical banking caste around the world. Bitcoin is nothing more than an encrypted, anonymous digital currency, the blockchain network of which is processed in a decentralized manner by the computer hardware of users / miners who extract Bitcoin.
The maximum number of Bitcoin is limited to 21 million, and there are currently over 18.5 million Bitcoins in circulation. The number of coins mined decreases during the halving that takes place every few years, i.e. the process of limiting the number of coins mined. Currently, 6.25 bitcoins are received for handling calculations leading to the creation of another block of the cryptocurrency network. Previously, after the previous halving, it was 12.5 bitcoins. The next one will take place in four years, i.e. in 2024.
So math and time play in favor of the value of the first cryptocurrency, which is structured to be a constrained good that gains value. With the current price of Bitcoin around $ 26,000-27,000, its capitalization (quantity multiplied by the price) seems to be astronomical and reaches around $ 500 billion. Thus, Bitcoin is worth as much as the largest global companies.
For comparison, Apple’s capitalization in 2020 reached $ 2 trillion, Amazon capitalized over $ 1 trillion (similar to Alphabet and Microsoft), and Warren Buffett’s Berkshire Hathaway company over $ 200 billion. For comparison, among Polish companies, the highest valued is Allegro at over PLN 88 billion, and KGHM and PKO BP at around PLN 37 billion. So is the current market valuation too high or does it still have growth potential? Probably no one knows the answer to this question at this point.
What price and value will Bitcoin reach in 2021?
This question cannot be answered unequivocally. The valuation of assets such as cryptocurrencies is very difficult to predict and is subject to frequent dynamic fluctuations. It is also largely due to the lack of ‘foundations’, such as in the case of joint stock companies that have stable headquarters assets, revenues and innovative products or services. Bitcoin does not have such foundations, nor does other cryptocurrencies.
Predictions based on the history of Bitcoin price development
The previous increase during the first bull market was around 1000% between April and December 2013. from $ 100 to $ 1000 for the purchase of Bitcoin (BTC). Another boom in 2017 gave a rate of return of around 2000% in a similar period. from about $ 1,000 to $ 20,000 for 1 BTC. As many of you know, history likes to repeat itself, although this does not always apply to investment markets.
However, following this comparison and analogy. During the global market crash of March 2020, where Bitcoin’s price has dropped to around $ 4,000-5,000 apiece, at the time of writing this article, it’s “only” about 500-600 percent. Taking into account the growing interest of investors and the media. Following this line of thinking, the price of Bitcoin may reach up to 50,000 in the coming weeks or months. dollars for 1 item.
If the increase reached 2,000%, this value would reach 100,000. dollars. In our opinion, this is a rather unlikely scenario in the coming weeks. While it was not possible to buy Bitcoin at the very beginning, today it is offered by every bitcoin and cryptocurrency exchange operating in the world, because it is the key cryptocurrency project. Often, it is the basis of all trade and exchange for other cryptocurrencies.
What speaks for the rise in Bitcoin’s price?
In addition to the aforementioned arguments, in our opinion, the current reprint of money will be very important. Most central banks have been loosening their monetary policy for a few months now, creating new print and virtual money “out of thin air” through virtually zero interest rates. Undoubtedly, this will result in high inflation in 2021, which will also be visible in the equity and digital currency markets.
The second important argument is the upward trend in Bitcoin, the reversal of which is not yet visible. The third important piece of this puzzle is the technical analysis tip regarding the breaking of the historical highs at the level of 20,000. dollars. At the time of breaking such levels, the so-called the price resistance becomes a support level, which is a level below which the price may not fall shortly. However, this argument holds less weight in such a volatile and uncertain market.
Many analysts have long predicted increases in the prices of the first cryptocurrency. Some of them very boldly predict that its price will first reach the level of 100,000. dollars apiece, and then up to $ 1 million. Can Bitcoin reach this value in 2021? In our opinion, this is rather unlikely. In 2021, the price will rather climb up, but it may lose its dynamics and begin to adjust to circular, psychological barriers, e.g. 30,000 or 50 thousand dollars. However, there is much evidence that it will grow.
Remember that investing in Bitcoin and other cryptocurrencies involves a very high risk and may result in the loss of some or all of your capital. This article does not constitute investment advice under the applicable regulations, but is only a subjective opinion of the author. They don’t have to work!
More information on how and where to buy Bitcoin can be found here: gielda-kryptowaluty.pl/kupno-bitcoin/ – this article contains full, comprehensive information on how to buy Bitcoin (BTC) for cash and traditional currencies such as zloty, euro, dollars or British pounds GBP.