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Bitcoin Price Prediction — Future of Bitcoin price

Photo by Pierre Borthiry on Unsplash

Bitcoin Definition

Bitcoin, apart from being the first cryptocurrency, is also the famous and most used crypto asset. Bitcoin served as the best alternative to fiat currencies as a medium of exchange and store of value. Bitcoin becomes the inescapable portion of the financial space as the media eagerly covers the exponential highs and drastic declines in Bitcoin activity. Though more than 5000 cryptocurrencies are existing in the market, the craze for Bitcoin has never gone down.

According to Satoshi Nakomoto, the anonymous mastermind behind the concept of bitcoin stated bitcoin is an electronic peer-to-peer payment system. Since the cryptocurrency markets are available 365x24x7, the traded volume is high and thus the market capitalization. This causes a high degree of volatility in the price of Bitcoin. Since its launch in 2009, the cost of Bitcoin has reached the zenith now. It was once sold for $150 per coin, and now it is as high as $50,000, making it the most progressive asset compared to any real-world asset. With more and more institutional investors and crypto sharks treating Bitcoin as digital gold to hedge against inflation and volatility, the price of Bitcoin is expected to go even higher. This article lists out the major events in the timeline of Bitcoin and gives you an outline of the price of BTC in the near future that helps you make meaningful decisions.

Bitcoin history

The volatility of Bitcoin is all around the media, and the leading investors criticize it. Warren Buffet states cryptocurrencies as “worthless” and “Risky.” However, this has never dissuaded firms from accepting Bitcoin as a mode of payment. By accepting Bitcoin, the business owners can easily take their products and services to the global market, attracting a large Bitcoin user base. In Feb 2021, Tesla aired its decision to accept Bitcoin as a mode of payment for selling its high-end automatic cars. This created a hype in the timeline of Bitcoin, increasing the price.

Jack Dorsey, founder, and CEO of Twitter joined hands for Bitcoin endowment with Jay-Z. This collaboration aims to let the Bitcoin flag rise high in developing countries like India and Africa by investing 500 BTC. Though Elon Musk’s statement of Tesla accepting Bitcoin captured the headlines, hundreds of companies accept Bitcoin.

Initially, Xbox paused accepting Bitcoin due to its volatility. But now, it has provisionally resumed accepting Bitcoin for its store credits. In Oct 2020, PayPal launched Cash and Cash Plus applications to buy, sell, and hold Bitcoin and other cryptocurrencies of the user’s choice. (Source: Yahoo Finance Reports). Within the PayPal app, the users can learn and track crypto.

Even the e-commerce giant accepts Bitcoin but not as a direct method of payment. One can use Bitcoin to buy Amazon gift cards and vouchers through Bitrefill. Bitrefill authorizes amazon users to top-up subscription-based services that can be spent on Amazon.

Bitcoin’s pre-halving frenzy

Bitcoin has its unique concept of halving every four years. The number of coins in circulation is drastically reduced, creating a demand for Bitcoin in the market. As a result, the price of the coin escalates. 2020 was the year for Bitcoin. Following the halving in 2012, and 2016, Bitcoin halved again in May 2020, and the mining reward was slashed by 50% to 6.25 BTC. In the following 12 to 13 months, the value of Bitcoin ballooned.

Analyzing Bitcoin’s price trends, Charles Edwards stated that the best time to buy BTC is Sunday night. His shared charts showed that Mondays deliver the best returns and the weekends tend to be flat.

The halving stabilizes the Bitcoin supply, which is heading towards saturation. There will be no bitcoins to be mined after a certain point of time as the total supply of Bitcoins ever existed touches 21 million. Bitcoins might become rarer than they are now and even more valuable than gold. This will lead to more currencies as Bitcoin Cash forked from the original Bitcoin. Only scarcity defines the value of any cryptocurrency, including Bitcoin.

The advent of Wrapped Bitcoin — The wow factor

DeFi is the hottest trend in the blockchain space during 2020 and is the new wild west of cryptocurrency. Bitcoin enthusiasts were missing out on this opportunity as most of the DeFi protocols are based on the Ethereum blockchain. The concept of Wrapped BTC arrived to rescue the BTC holders where they can convert their BTC into ERC-20 standard tokens. WBTC started the year with a market capitalization of just $4.2 million, and it is now $2.7 billion.

With the concept of tokenization, the Bitcoin holders can now deploy digital gold in the emerging DeFi space to earn good returns. Wrapped BTC (WBTC) has become the leading tokenized Bitcoin asset by market cap in early Jan 2021.

The BTC investors were not getting an equal chance in DeFi, as there was no proper bridging between Bitcoin and Ethereum. Wrapped BTC solves the issue by delivering liquidity to the DeFi protocols. WBTC is an ERC-20 standard token backed by BTC on a 1:1 ratio, making WBTC very similar to a stable coin. The wrapped Bitcoins are held in reserve by the BitGo trust. Unlike the other stablecoins, the amount of WBTC in circulation is transparent as the underlying BTC is held in custody.

These WBTC can be used as collateral on the DeFi platforms as the market capitalization of Bitcoin is significantly greater than ETH. The amount of BTC being converted to WBTC is rising exponentially. The total value locked in WBTC is increased by 943% from May to August in 2020. (Source: DeFi Pulse)

Bitcoin transactions by crypto whales

The transaction of more than $1 billion has occurred more than once in the Bitcoin network in this history of cryptocurrencies. With the more efficient cryptocurrency exchanges, more significant transactions are pretty more often than before. These huge Bitcoin transactions indicate the success of Bitcoin as a medium of exchange. Bitcoin remains the most trusted payment rail as billions of dollars of Bitcoin can be moved seamlessly and cheaply.

Anonymity is an added advantage

The highest transaction ever recorded on the Bitcoin blockchain is $1.1 billion on April 10, 2020. The number of Bitcoins transferred was 161,500. This isn’t huge as there were more Bitcoins transacted before. In 2013, there was a transaction of 194,993 BTC in a single transaction. But the value of each Bitcoin was comparatively very low, making the total value of the transaction around $150 million. An even larger 2011 transaction involved 550,000 BTC, but the total value is only $1.5 million as BTC was just $3 at that moment.

There is an exciting thing about the largest transaction held on April 10, 2020. Only 146,500 BTC reached the destined wallet, and the remaining 15,000 BTC was kept in another wallet. Paolo Ardoino, the CTO of Bitfinex, tweeted that 15,000 BTC was used to refill the hot wallet, and the remaining was sent to one of its cold wallets. Although the transaction involved a considerable sum, the most noteworthy thing about this transaction was the transaction fee associated. The fee was only 0.00010019 BTC ($0.68 approx), making it almost negligible.

Bitcoin future

In 2020, on Black Thursday, Bitcoin’s price crashed to $4000. But the US and other nations took the remedies to put back the Bitcoin in the financial spotlight by combating the pandemic situation. Right from the beginning of 2021, Bitcoin is on an uptrend, reaching the all-time high of $60,000. Plan B, the Bitcoin expert, created a popular stock-to-flow to estimate the price of Bitcoin in the near future using the scarcity of the asset. According to the model, the price of predicted as $288,000 in the next cycle peak, taking place in the next couple of years.

There is a lot of money printed globally, and more individuals are thinking about hedging and retaining the value. Bloomberg says Bitcoin needs no further institutional adoption to reach $300,000.

Having set the new all-time high in 2020 and continuing it in 2021, Bitcoin is expected to repeat the bubble behavior. Bitcoin will break out into a new ball run and will go parabolic. With the short-term trajectory for the next cycle, Bitcoin’s price could reach $325,000 this year.

More articles you would love reading about Bitcoin

https://www.blockscribers.com/article/bitcoin-reaches-50-000-should-i-sell-/12

https://www.blockscribers.com/article/china-bans-cryptocurrency/8

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Blockscribers Staff

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