Just this year, the value of Bitcoin has increased by 150%. This means that the growth rate of this cryptocurrency in 2020 has been much higher than the same period in 2017. A few hours ago, Bitcoin surpassed the $19,000 mark and is trending upwards.
Many commentators in the economic sector have stated that the cryptocurrency market has matured over the past three years.
What’s Different About Bitcoin This Time Compared to the Past?
Mati Greenspan, the portfolio manager and founder of Quantum Economics, stated: “The main difference between now and 2017 is that back then, the market was driven by retail speculation. Now, it is driven by corporations and billionaires.”
For instance, the financial company Fidelity on Wall Street has established a new unit to allow its customers to invest in digital assets, while PayPal has recently begun allowing U.S. users to buy, hold, and sell various cryptocurrencies.
There are now prominent investors pouring money into Bitcoin, including hedge fund billionaires such as Paul Tudor Jones (founder of Tudor Investment Corporation) and Stanley Druckenmiller (chairman of Duquesne Capital).
Antoni Trenchev, managing partner of the cryptocurrency lending company Nexo, commented: “It’s not surprising that these names are getting involved. They buy in stealth mode, but once Bitcoin hits the treasury, the whole world will know about it, similar to the gold market surge in the 1970s.”
The key event here is the Covid-19 pandemic. Cryptocurrency enthusiasts have compared Bitcoin to safe-haven assets like gold, which investors tend to flock to during economic uncertainty. They argue that the Covid-19 related stimulus measures have diminished the appeal of traditional currencies like the U.S. dollar.
Where Will Bitcoin Go From Here?
There are many predictions about the sky-high prices Bitcoin could reach in the near to long term. Many fans of this cryptocurrency also agree that Bitcoin has the potential to soon surpass its all-time high.
Greenspan noted: “A new all-time high is not only possible but is predicted by Bitcoin enthusiasts to happen any day now.”
Pascal Gauthier, CEO of the cryptocurrency wallet hardware manufacturer Ledger, expressed that he believes the latest Bitcoin price surge will last longer than the previous one.
“Bitcoin has gained recognition and a foothold in the market; it will now become an official currency,” he said. “2021 will be very exciting and will still be about building great products and technology, but this time it’s the wind filling the sails.”
Some cryptocurrency speculators have made bold predictions about where Bitcoin’s price might rise next. Mike Novogratz, CEO of Galaxy Digital, believes Bitcoin could reach between $55,000 and $60,000 by the end of this year – although he also mentioned that it could “easily” hit $40,000 by the end of 2018.
A Word of Caution
Cryptocurrencies are known for their volatility. It dropped sharply to a low of $3,122 in 2018, then surged to nearly $20,000 last year. Just last week, Bitcoin also gained over $2,000 and has now reached $19,348 (equivalent to 447.9 million VND).
Soravis Srinawakoon, CEO and co-founder of cryptocurrency software company Band Protocol, mentioned that it remains to be seen whether Bitcoin can reach a new high by the end of this year.
“Over time, the narrative around Bitcoin is solidifying, although the belief in its payment capabilities worldwide has yet to materialize,” he added. “This has led to ongoing asset volatility.”
Nevertheless, there is widespread confidence in the outlook for this digital currency. Trenchev – who predicted earlier this year that Bitcoin could reach $50,000 (over 1 billion VND) by the end of 2020 – stated, “There is increasing evidence of the price approaching that mark.”
Srinawakoon noted: “All signals are strongly responding to the next wave and new users in the near future.”
Source: CNBC
