Bitcoin breaks the $20,000 mark for the first time – and the scarce currency is expected to keep rising.Time to find the best bitcoin exchange to buy!
Crypto experts are overflowing with superlatives in their forecasts. The value could increase at least fivefold. But there are also tangible warnings. What are the reasons for this new btc increase?
Who is offering more? No expert prediction for the rise in the bitcoin price seems outlandish at the moment. Brian Estes, chief investor at hedge fund Off the Chain Capital sees the oldest and most important cyber currency at $288,000 by the end of 2021.
That’s roughly 14 times the current record high of around $21,000. “I’ve already seen Bitcoin increase tenfold, twentyfold and thirtyfold within a year.” So the fivefold increase in the price now achieved from the March low is no big deal, he said. If you are new to trading, you should check out this kind of software.
Mining reward halved What does “halving” mean for bitcoin?
Naeem Aslam, chief market analyst at brokerage Avatrade, makes a similar argument, calling for a comparatively low price target of $100,000. “You might want to laugh at the thought of that, but you can’t forget where the price was six years ago.” At the end of November 2014, one bitcoin cost about $375. Since then, the price has increased more than fiftyfold.
Citigroup analyst Tom Fitzpatrick even trusts Bitcoin to rise to as much as $318,000 in the coming year. He justifies this, among other things, with a limited supply. “Off the Chain” expert Estes bases his prediction on a model for calculating the scarcity of goods such as gold.
“Bitcoin predictions by hedge funds are no good”
From Kevin Muir, an independent cryptocurrency trader, these approaches only earn headshakes. “None of the bitcoin predictions from hedge funds are any good. You can’t cast a mania into a model.” To be sure, he said, it’s entirely conceivable that Bitcoin could rise to $200,000 or $300,000. “But does anyone really have a clue? No way!” Currency trader Juan Perez of financial services firm Tempus also expresses skepticism. A bitcoin price of $100,000 would be a bet on the collapse of the world financial system. “The governments of the world will not allow that to happen.”
Bitcoin is an internet currency whose price is determined solely by supply and demand. New digital coins are created by users providing computing capacity to encrypt transactions and being paid for it in Bitcoin. In the process, the amount of Bitcoin issued in a given period is automatically halved at regular intervals to prevent inflation. The last “halving” to date was in May 2020.
A maximum of 21 million Bitcoin can be created; currently there are 18.5 million. The supply shortage is exacerbated by the entry of payment service providers such as Paypal or Square into the cryptocurrency business, experts at hedge fund Pantera wrote in a letter to shareholders. They soaked up cyber currencies like a sponge.
More criticism of cryptocurrency Facebook has a new plan for Libra
In parallel, the “Whale Index,” which counts cryptocurrency accounts with balances of at least 1,000 bitcoin, has reached a record high, says Phil Bonello, chief analyst at Grayscale, an asset manager specializing in cyber forex. There are now more than 2200 such large deposits, he said. That’s up 37 percent compared to 2018, he says, adding that another indication of growing interest from institutional investors is the rise in trading volume in bitcoin futures on the U.S. exchange CME, says analyst Salah-Eddine Bouhmidi of brokerage IG. According to data provider Skew, futures worth more than a billion dollars were traded there in mid-November for the first time within a week since the securities were introduced in late 2017.
Cyber currencies received additional attention due to the apparently approaching market launch of “Libra,” says analyst Timo Emden of Emden Research. According to the Financial Times, the online network Facebook’s internet currency is set to launch in January 2021, albeit in a slimmed-down version due to opposition from central banks and regulators.
- But Emden warns that it is doubtful whether the digital currency, which has since been renamed “Diem,” will get the green light this time. In parallel, central banks are already tinkering with their own cryptocurrencies.
- “Even if bitcoin doesn’t have to play a role in the end, the cryptocurrency is currently at the top of investors’ lists as a hot speculation object,” says analyst Jochen Stanzl from online broker CMC Markets.
- To secure your funds it is recommended to use a bitcoin paper wallet.