The analysts still cannot agree on what is behind the new rise in the most popular cryptocurrency. But that doesn’t seem to stop it from growing.
Since the beginning of the year, the bitcoin rate has grown by $11 000 and in the last month alone, the cryptocurrency has risen in price by more than half. On November 21, the rate reached $ 18 600.
There is very little left before it surpasses the December 2017 record. Back then, BTC cost more than $ 20,000.
What is happening to Bitcoin – justified growth or just another bubble is gonna explode soon? We have studied what financial analysts write about bitcoin. Spoiler alert – the opinions differ.
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Let’s get back to the versions and opinions.
Bitcoin started the year at $7 177 per coin. From March to October 2020, the course only went up.
Since the beginning of November, bitcoin has dropped slightly in price, but the fluctuations are insignificant.
There are several reasons for the price increase:
- Interest from institutional investors. The main difference of current state of events from the situation in 2017 is that now institutional money is being invested in bitcoin, while in 2017, the rate fueled the demand of individuals, writes The Independent. Funds such as Fidelity Investments, Ark Investment Management, and others have added cryptocurrency to their portfolios.
- Instability in the world. Due to the coronavirus pandemic, confidence in traditional currencies and stock markets is falling (if that’s the case for you, don’t forget to check out thejingstock.com). Some are beginning to perceive bitcoin as the new gold. In particular, it could happen due to the fact that the number of bitcoins is limited. This position is shared by JPMorgan financier and analyst Nikolaos Panigirtzoglou.
- Entering the mainstream. Cryptocurrencies are a highly profitable asset but very volatile. Entering the mainstream gives more confidence to investors.
The payment solutions company Square has invested 1% of its assets in bitcoin. Business intelligence platform developer Microstrategy has converted $425 million of its reserves into bitcoins. And the American payment system PayPal will allow selling and buying bitcoins using an account in the system. Clients of the system will be able to pay with bitcoins wherever PayPal is accepted, writes the BBC.
Bitcoin’s move towards a means of payment will secure its final recognition.
- Fear of missing out on something important. More and more people start buying bitcoin in order not to miss the growth, and only then begin to study what it is.
Following institutional investors, private investors are beginning to show interest in bitcoin again. They see a growing course; they see famous people like Arya Stark from Game of Thrones Maisie Williams, Skype co-founder Jaan Tallinn and others showing interest in or that they have already bought Bitcoin.
All this is fueling demand right now. But then what?
Reliable asset or another bubble?
Everyone can see what is happening, but foreign experts have no consensus about the future of cryptocurrency.
Bitcoin is not the best choice for those fearing the volatility of traditional currencies like the dollar.
Bloomberg, as the bitcoin rate grows, pays more and more attention to cryptocurrency in publications but gives different opinions. If in October a forecast from analyst Mike McGlone appeared on the pages of the publication with the assumption that the currency will grow and by 2025 may reach a price of $ 100 000, then by the current time, the tone is more restrained.
In one of the publications, the cryptocurrency is called one of the craziest assets on the market. Stars and large investors are making a stir around bitcoin. But the crypto space is still very insecure: the wallets are being hacked, and the bitcoins are used for money laundering.
On the other hand, the fundamental weakness of bitcoin as a currency and a store of value has not yet been eliminated, and the rise in the rate looks like inflation of another bubble, Bloomberg notes in another material. But that doesn’t necessarily mean it will crash in 2021.
The main thing that happened to bitcoin this year is that it crossed the Rubicon and became an asset – Bloomberg quotes Mike Novogratz, a former Wall Street investor who has jumped into the cryptocurrency camp.
To sum up
The Bitcoin’s growth was far from random. There are actual reasons behind such an event. The reasons include influencers being interested, bitcoin’s entering the mainstream world, and the instability of the era we are going through. If you’d like to jump on the opportunity, thejingstock.com is awaiting you.