For the first time ever in Bitcoin’s history, the price surged and surpassed $34,000 in January 2021. This fulfilled a lot of expatiations that experts have made over the past years, as Bitcoin entered a bull cycle after the much anticipated halving on May 11, 2020.
But what surprised a lot of Bitcoin’s advocates is that the price rose after a consistent increase for over a year. Naturally, these events were well covered in the media, and consequently, more people got acquainted with the crypto world and its opportunities.
Thus, new investors might be curious about what factors influenced the price increase and what will happen next. Here we cover everything you need to know about the price of Bitcoin and the future expectations after its spectacular rise.
What Determinates The Price of Bitcoin
A Blockchain network is a distributed digital ledger that functions without supervision or interferences of a financial institution. The users of the network- miners are responsible for the security of the system. They also verify the transactions on the network.
So, because Bitcoin is powered by decentralized blockchain technology, the biggest influence on the price is the interaction of supply and demand. However, in the Bitcoin ecosystem, there isn’t a single market where you can invest in BTC.
Today there are many different exchange sites where users can invest in BTC or other cryptocurrencies and trade their BTC for fiat currencies or other digital currencies. This means that if you do your own research, you’ll see there’s a minor difference between the price of Bitcoin on different trading platforms.
This means that the price surge is driven by the changes of the side of the demand or supply as well as any events that impact the relationship of these forces. To put it in a nutshell, when there’s a higher demand than a supply for BTC, the price rises. Hence, when the supply surpasses the demand, the price decreases.
What Does It Mean for Investors?
The bullish cycle of Bitcoin and its continued rise after the halving of May means there is a great range of new investors that want to enter the world of crypto and invest in BTC.
A great site for beginners is Bitcoin Code. It uses AI technology, which means the auto-trading robot will complete most of the work for you. You can visit https://bitcoin-code.io/ for more information. The members of the site reportedly can gain up to £1,200. Also, beginners are at an advantage here because they can learn from top tutorials and guides on this topic. To open an account here, you need to deposit at least $250. The process is very simple and fast, so you can start trading in no-time.
Bitcoin Halving is an event programmed to happen by Satoshi Nakamoto (the inventor of Bitcoin) after 210,000 BTC are mined. It cuts in half the block reward of the miners, which means it directly influenced the current supply of BTC.
Moreover, the number of BTC is also capped at 21 million BTC, which means each halving only further reduces the pool of BTC. So, after a halving, the price typically follows an upward trend. In 2020, the price also increased, as the block reward was reduced from 12.5 BTC to 6.25 BTC. Another halving is anticipated in 2024, which again will split the reward of the miners.
Rival cryptocurrencies also experienced growth during this time. Ether, most notably, has seen a rise of over $1,000. All in all, the position of other cryptocurrencies on the market can also influence the price of Bitcoin.
The record-breaking price of Bitcoin has also sparked the interest of investors in other cryptocurrencies. Even though Bitcoin has the largest market cap, the competition in the crypto market grows stronger as a lot of businesses are developing their own digital cryptocurrencies. Some examples include Diem, a cryptocurrency by Facebook, while other corporations that also want to develop cryptocurrencies are Arias Intel Corp, BitBlox Technologies Inc, among many others. At the moment, there are over 2,000 cryptocurrencies, and we can safely say the number will grow even more.
Some people think that the price will hit $100,000 in 2025, which is one year after the expected halving in 2024. But, some experts think Bitcoin will reach this milestone by the end of 2021 because there was a continual, steady increase in the price in 2020 and so far in 2021.
Other members of the Bitcoin community think that the interest of corporations and government institutions around the world will grow and help Bitcoin enter the mainstream. With prominent ambassadors like the Winklevoss twins and the support of companies like Microsoft and Shopify, the future of Bitcoin looks very promising.