2021 has been a wild roller coaster ride for bitcoin. Starting trading at under $30,000 in the previous year, the price of this cryptocurrency surged to almost double by April and again took a dip in the summers. It claimed an all-time high of around $68,000 in November only to fall again in December. So far, Bitcoin is struggling to make a profit in the market due to the factors of Omicron, which is sending the market into turmoil again.
Bitcoin price is extremely volatile, both up and down ways. Hence, it is possible to reach the $100,000 mark anytime this year.
Bitcoin started at the price of $0 back in the year 2009. Its price rose to $29.60 by June 7, 2011, and due to the recession, it went down to $2.05 by mid-November, the same year. The following year was not so eventful for Bitcoin, however, 2013 gave a strong boost to its price. The year's trading began with a $13.28 market price and rose to $687.02 by the end of December.
In 2014 the price was downturned and it touched $315.21 by the start of 2015. In 2016, the cryptocurrency slowly started building up its price until it broke $2,000 in the month of May and then skyrocketed to $19,345.49 on December 15 of the same year. By this time mainstream investors, economists, and governments took notice of Bitcoin and started investing. Scientists and other institutions started creating competitors of this cryptocurrency.
For the next two years, the price was almost maintained due to a small burst of activities. There was a resurgence of the price in 2019 during mid-November, however, the price dropped to $ 6,635.84 again in December.
In 2020, the economy went into a shutdown due to Covid-19, however, Bitcoin’s price surged due to an increase in activities. The trading started with $6,965.72 in January and rose to almost $29,000 by mid-December of the same year, an increase of almost 416% from the beginning of the year. The pandemic shutdown and the subsequent fear of government policy investors contributed to the rise in the price of Bitcoin in 2020.
Within less than a month’s time, Bitcoin smashed its previous records and reached $40,000, the all-time high value of bitcoin at that time. By the middle of April, its value touched an all-time high again as the Coinbase platform became public. By this time, institutional interest further increased and kept pushing the price on the higher side.
However, the price took a dip in the summertime by almost 50% but then again recovered and reached an all-time high of $67,549.14 by mid-November. Due to the introduction of a new variant of Covid-19, Omicron, the market again took a slight dip in December.
The prime reason for the rise in the price of Bitcoin after 2017 was the influx of mainstream investors in large-scale institutions like pension schemes, university endowment funds, and investment trusts. Before 2017, the market was dominated by individual retailers who believed in the scarcity of bitcoins and bought into the FOMO.
Bitcoin gained its demand and kept growing due to one of the major reasons, its availability. People believed in the value of bitcoin and invested, which led to demand and a shortage of supply. By design, only 21 billion Bitcoins will always be there in the market, hence its availability will always stay limited with disregard to the supply and demand. And by the laws of demand and supply, the price is bound to increase as long as it has popularity.
Bitcoin’s price is going to continuously purge given the trust it has gained over the years. Big names in the market like the billionaire investor, Paul Tudor Jones, and insurance giants like MassMutual have invested heavily in cryptocurrency.
Bitcoins are also getting backed by large consumer-facing payment names like Paypal and Square. Paypal is allowing its users to buy, sell and hold Bitcoins directly through their Paypal accounts.
Bitcoin is coming more and more into daylight with famous policies like Visa offering a handful of bitcoin-based debit and credit cards through the platform of Coinbase.
Bitcoin underwent its major update known asTaproot. It was aimed at making Bitcoin a mode for digital transactions. Another major update was Segwit, which took a long time for miners to adopt this change.
Taproot was widely accepted and welcomed by investors and traders. More daily use of Bitcoin can mean the attraction of new users in the upcoming time as well.
People are considering Bitcoin as a legit asset in the market because of its potential to increase its value as the market price rises. The prime reason is a cap on the number of Bitcoins that can ever be mined, which is unlike the cash of other countries that can be printed without a fixed limit to keeping up with inflation.
More and more big investors are getting involved in the cryptocurrency industry every year. Silvergate Capital runs an exchange, called SEN, that allows digital currency payments. Apart from that, the Central American republic of El Salvador became the first to legalize bitcoin as a tender.
All of these could give a push to the rise in the price of Bitcoin in 2022. An analysis by financial heavyweight Goldman Sachs, published on January 4, suggests that Bitcoin can reach the mark of $100,000 in the near future.
Goldman Sachs compared Bitcoin to gold in that report and backed the theory of Bitcoin being used as a store of value by more and more people. One of its prime reasons is the definite number of Bitcoins that will always be available in the market. The report suggests Bitcoin has already taken up one-fifth of the store of value market and it is going to gain a larger share in the coming days.
“Bitcoin may have applications beyond simply a store of value’ — and digital asset markets are much bigger than Bitcoin,” the report asserted. “But we think that comparing its market capitalization to gold can help put parameters on plausible outcomes for Bitcoin returns.”
The Goldman Sachs report has clearly mentioned that soon Bitcoin is going to take over gold and it is backed by the logic of the market price during the Covid times. Gold’s market price became stagnant throughout the pandemic, while Bitcoin’s price was on a haul.
Bitcoin is slowly taking up the interest of big market investors and also working towards making it more accessible to people through digital exchange platforms like Paypal.
If Bitcoin hits the $100,000 mark this year, it is going to be a crazy ride. If you’re thinking of investing in cryptocurrency, know that it is a volatile space, and do not use up all your dollars over here. Keep your bets at a small percentage and start with Bitcoin, as it is less risky. But all investments need careful research and assessment. Coin Gabbar is providing detailed research and analysis about the.