The Reality About The Bitcoin Price Predictions

The Reality About The Bitcoin Price Predictions

Bitcoin surpassed the $60,000 USD value, an all-time high at Coinbase as of March 13, 2020 (7:25 am ET). This marked the incredible history of (Bitcoin) digital gold that surged over 80% during the year and the price hiked more than 690% over the last 12 months as reported by Coinbase. The value of Bitcoin crossed over $1 trillion in the first half of March 2021.

Predictions About Bitcoin Price:

The wild ride of Bitcoin which traded at around $4000 in March 2020 surged to $23,000 in December 2020. This trend continues to rise in the first quarter of 2021. Dozens of experts predicted a larger spike in the value of Bitcoin ranges from $50,000 to $300,000 by the end of 2021.

Factors that influenced Bitcoin price

Supply and Demand

Bitcoin is not backed by central banks or governments. Bitcoins are bought and sold through exchanges and the demand and supply factors determine the price of the Bitcoin.

Institutional Investors 

The rapid adaptation of Bitcoin by the giant organizations also drives up the value of Bitcoin such as Tesla Motors which invested around $1.5 billion worth of Bitcoin. Mastercard will set up a network of cryptocurrencies especially Bitcoin. Payment gateway giants PayPal, and BNY Mellon will adopt Bitcoin payment transactions.

Adoption of Digital currency by Central Banks

The Bank for International Settlements published a report of the collaborated group of central banks. Central Bank digital currencies highlighted that around 80% of the world’s central banks are striving to adopt digital currency as means of safe payment transactions across the border. A network of these Central banks includes Canada, Japan, Sweden, Switzerland, United Kingdom, United States, European Central Bank, and the Bank for International Settlements.

Fear of Missing Out (FOMO)

Sometimes wealthy investors purchase Bitcoin and store them in their wallets, it stimulates the market and people start buying Bitcoin under circumstances of FOMO. No one wants to be left behind and will jump in to be part of the so called revolution. Many have missed out on being early adopters so as institutions start investing more, more people will buy.

Biden’s Intention to Regulate Cryptocurrency

The newly elected Biden Administration has higher priorities to regulate cryptocurrency which fuels the demand for Bitcoin.

Excessive Use of Digital Payments:

The world is moving towards a cashless society. The Covid-19 pandemic accelerated the use of digital payments and squeezed out cash in payments. Bitcoin transactions not only facilitate quick funds transfer to hospitals, individuals, and businesses but also outperformed all other asset classes.

These coupled factors will drive the demand and price for Bitcoin in 2021.

bitcoin-price-predictions-are-unreliable

Bitcoin Price Predictions are Unreliable:

Another strong version regarding Bitcoin price prediction is the shift away from the current price hike; it asserts that Bitcoin can also be on the collapsed because of the lack of sufficient analytical support that drives the Bitcoin price predictions. These predictions are over-hyped and are not linked to fundamentals. Fundamentals refer to set the financial value of the currency.

One of the main reasons is the unclear future store of value that can be saved and exchanged for goods or services. In the past, the value of Bitcoin remained quite volatile that limited reliable price predictions.

In short, no one can predict Bitcoin price where all crypto experts have unanimously agreed to the same price in the future. Similarly, there is no threshold limit when prices of Bitcoin dropdown. Usually, price predictions are based on demand and supply factors that can be stimulated by the rapid adaptation of institutional investors, Tech companies, financial institutions, and payment solution-providing companies etc.

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ALT 5 Sigma covers fintech, blockchain, Bitcoin and cryptocurrencies bringing you the latest news and analysis on the future of money.