2020 has been relatively volatile for Bitcoin to say the least. As the year is coming to an end, more people buy Bitcoin than ever before, and we are expecting the popular cryptocurrency to experience massive growth in value.
But what fuels this positive market sentiment? Over the next few chapters, we will explore Bitcoin’s YTD performance, how 2021 is about to unfold, and share the opinions of industry experts when it comes to the coin’s future price. Let’s delve in.
Bitcoin’s YTD performance
The best way to describe 2020 when it comes to the crypto markets is to label it as an “unstable recovery”. Sure, we are used to the volatility of the crypto markets, but this year has been unlike any other, and we can see it reflected in the current Bitcoin price.
This year we experienced Bitcoin’s first-ever Black Swan event. Due to the pandemic-related lockdowns and the overall fear of the public, we saw many investors taking a position in cash, all at the same time, talking the price of Bitcoin nearly 60% in two weeks alone. All this occurred towards the end of the first quarter of the year (March 2020)
The bitcoin halving
Thankfully, 2020 was a banner year for Bitcoin thanks to the reward halving that occurs once every 4 years. The event always drives more retail investors to the cryptocurrency and increases the interest of the public in obtaining it. The halving, which occurred in May 2020, helped the price of Bitcoin recover to the $8000 levels, nearly doubling its value in two short months.
DeFi increase in popularity
Decentralized finance was the hot topic of the past summer, mainly for the altcoin markets. While most Ethereum-related tokens experienced a boost in demand, and decentralized exchanges increased in popularity, Bitcoin also grabbed more market share.
Institutions are buying
Possibly the most bullish event of the year is the most awaited institutional participation that we have now started to see. Public companies like Microstrategy, Square, Grayscale, and Paypal, are now buying more Bitcoins than those produced on a daily basis by miners. This massively limits the available supply (supply shock) and drives more demand to the markets, bringing Bitcoin back to its ATH prices.
Why 2021 seems optimistic
As we are entering 2021, there are many developments that make us optimistic about both the survival and price appreciation of Bitcoin. More specifically:
- The institutional investors continue to increase, and we are seeing more and more large players buying up coins to hold onto for a longer timeframe.
- Banks are now more welcoming to crypto, and many have even opened custodial solutions to hold onto the cryptocurrency of their customers. While this goes inherently against the values of Satoshi Nakamoto, it does offer more transparency and trust, allowing the general public to onboard easier.
- More world-class investors are now not only Bitcoin proponents but convert (part of) their wealth in order to avoid potential scenarios where their funds could be negatively affected. This brings us to our final point.
- The economy and our current financial system will continue to go sideways into 2021. We are already starting to experience the aftereffects of the uncontrolled money printing practices that have led to high numbers of inflation; nearly 20% of all USD in existence have been printed this year alone.
What do experts say?
Antony Pompliano, the founder of Morgan Creek Digital and author of the Pomp Letter, believes that Bitcoin will reach $100.000 in value by the end of 2021.
Plan B, an anonymous character also known as @100trillionUSD on Twitter, believes that Bitcoin could peak at $288.000 before the next Bitcoin halving, emphasizing that the event will probably occur in 2021 or 2022. Note that the anonymous figure claims to be an investment banker with many years of analysis experience.
Citigroup financial analyst Tom Fitzpatrick believes that Bitcoin may hit a peak of $318.000 during this market cycle, specifically due to the “network effects” caused by increased institutional and retail participation.
Bloomberg strategist Mike McGlone sees Bitcoin as a great investment that performs better than gold and sees the popular cryptocurrency topping out at $170.000 during this market cycle.
Finally, Mike Novogratz, one of the world’s most popular billionaire investors believes that Bitcoin will go sideways into 2021 (reaching $16.000 at its bottom), before it continues its upward trajectory to reach $60.000 in value.
It’s safe to say that the market sentiment is, by all means, positive, as we are seeing an increased amount of participation in the markets and more interest by both institutions, retail buyers, and governments.
What does this mean for Bitcoin? We will have to be patient as the events unfold. Until then, we will keep on promoting Bitcoin’s potential and stack Satoshis!