19
Jan
2021

What might happen to Bitcoin this year?

In recent days, Bitcoin, the main crypto, has been rising in price every day. The currency reached Ibovespa and was worth more than $ 23,000. Because of this high and the great visibility that the asset had, new investors and onlookers are entering this universe of cryptocurrencies.

The trend is that for this year, Bitcoin will continue to grow, becoming one of the main investments for 2021. There will be more adhesion/exposure of institutional players to the crypt market, raising its market value to levels not yet tested since 2017, in a much more mature environment than it was at that time. This situation did not escape the shocking rise of Bitcoin late last year.

For the first time in its history, Bitcoin (BTC) reached its record price on Wednesday, December 16th 2020, even exceeding the barrier of $ 20,000. The world’s most popular cryptocurrency had reached this peak just a couple of weeks after its last peak.

The rise that the currency has been experiencing in recent months is different from the rebound of 2017 and, in fact, some experts believe that it will continue to grow more. Even the most optimistic say it will reach the value of $ 100,000 in the end of 2021. In an article published in Reuters, it is said that investors and the main hedge funds are betting that the value of bitcoin will reach that figure, that is, that it will quintuple.

What is the reason for this growth?

First, there is a growing institutional demand. While the rebound in 2017 was mainly the work of retail investors, the one we were experiencing in 2020 had bigger fish behind: Bitcoin is supported by institutional investors that are pushing the commercial activity. As an example, PayPal will allow trading with bitcoin, Ethereum, Bitcoin cash and Litecoin. Today, many investors see in Bitcoin a digital store of value and an alternative to gold.

This is precisely where another important reason for these rebound lies: its role as a store of value in the eyes of investors.

Another very relevant reason is that there are few bitcoins to sell: 74% of clients who have bitcoin do not move them from their portfolio. There are 14 million bitcoins that have not been touched in two years. This means that there are only about 3.5 million bitcoins on the market willing to be sold. When there is a shortage, assets go up. Finally, there is a certain confidence on the part of users towards the cryptocurrency market, especially favored by actions such as the acceptance of payments with Paypal digital currency. Citizens see this ‘digital gold’ as a safe asset. They also began to diligently seek information about bitcoin trading, including supporting instruments such as the YuanPay group.

Released in 2009 as open-source software by a mysterious programmer – or programmers – under the pseudonym Satoshi Nakamoto, the real identity of its creator is still unknown. Bitcoin is the first digital currency, used and distributed electronically, of which no institution or person controls its issuance, spending or reservation.

Finally, it’s not only about BTC, it’s about cryptocurrencies

There are many improvements to be implemented and all will show that active cryptography is a path of no return and increasingly adherent to our society. It will be the victory of those who have always believed in the potential of these currencies.

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