Is this the best time to buy bitcoins? How far will the current bullish market trend continue? Were JP Morgan and the rest correct by saying that Bitcoin may hit […]
Is this the best time to buy bitcoins? How far will the current bullish market trend continue? Were JP Morgan and the rest correct by saying that Bitcoin may hit $50k or even surpass $100k?
Currently, the value of a single Bitcoin coin is above $38,000 and you have definitely seen the current monster bullish rally that Bitcoin has unleashed since November 2020 to date.
And probably the memories of what happened after the 2017 Bull Run are still fresh and you are wondering whether that could be the case in 2021.
What is different about Bitcoin’s bullish trend this time around?
In 2017, the Bullish rally was very short-lived and the market started plummeting even before the end of December. The highest all-time high was actually hit on December 15th, 2017, and after the market started dipping. By January 5th, 2018 for example, the price of Bitcoin had already dropped by $2,000 and counting.
In 2021, things are quite different. The trend has actually gathered momentum to gain over $10,000 in less than 10 days.
Analysts, investors, and traders have all put their fingers crossed for too long anticipating the bubble to burst but the market seems to be relentless in its push to hit new highs this year and probably beyond.
What is causing the current bullish trend?
2020 has been a year full of surprises with the first surprise being COVID-19, which almost paralyzed the economy of the whole world. To some extent, the COVID-19 pandemic affected the value of many fiat currencies including the US dollar and investors started worrying that it would collapse and they had to find new ways of investing their wealth.
Gold which has long been perceived as a haven in such economic times, however, does not offer the prospects that Bitcoin offers in terms of value appreciation. And that is what saw quite a number of wealthy people as well as big institutions like PayPal, MassMutual, and Square investing in Bitcoin. Also, big investors like Paul Tudor Jones have invested in the digital coin.
Big institutions and Banks investing in Bitcoin proves that Bitcoin is a force to reckon with within the financial investment sector.
Bitcoin was actually ranked as the best performing asset of the class of 2020. And for sure no other asset has gained as much value as Bitcoin during the COVID-19 pandemic. And if it withstood the tough economic times, it could perform better as the world returns to normalcy.
Projections By analysts and investors
In a note on the 4th of January 2021, JP Morgan said, “At its market cap of $575 billion, bitcoin would have to surge to $146,000 to match the total private-sector investment in gold via exchange-traded funds or bars and coins.” The note continued to say, “While we cannot exclude the possibility that the current speculative mania will propagate further, pushing the bitcoin price up towards the consensus region of between $50k – $100k, we believe that such price levels would prove unsustainable.”
On 21st December Elon Musk, Tesla CEO seemed to excite Bitcoin enthusiasts after responding to a tweet by Michael Saylor, a Bitcoin booster, who suggested that he (Elon) should convert the balance sheet of Tesla from US dollars to Bitcoin. And though seeming farfetched, some companies or institutions have already done that.
However, despite the prospects from most analysts and investors that Bitcoin could still rise higher than its current value, there are some like David Rosenberg, a chief economist, and strategist at Rosenberg Research and Associates who believe that Bitcoin is currently in a bubble and that investors don’t know how it works.
This post does serve as an investment opinion. The cryptocurrencies market is very volatile and you ought to do thorough research before investing in any of them including Bitcoin