A year ago, on January 10, 2020, Bitcoin was priced at $7,808. And it was recently as October that it was drifting in price in the vicinity of $11,000. But for many and completely out of nowhere, the price of Bitcoin took off past the $41,000 mark to attain a new all-time high of $41,660 within the past day.
Now, with retail investors increasingly eyeing bitcoin in light of its recent gains, new research shows how bitcoin “whales” accumulated a huge number of bitcoin tokens in December, helping the bitcoin price to never-before-seen highs.
The resilience of that digital coin and others – and also the reasons behind it – have many excited not just about the prospects for this young asset class in 2021, but also for the overall adoption of this burgeoning financial technology.
With a bit of help from the media, the general population has become wondering about the fascination girls have for the new venture known as bitcoins. As a currency, it stands out among all others. The issue is that a lot of folks still do not realize how it works or even just how to use it.
These days, as Bitcoin and cryptocurrency investors try to call just how far this already huge rally will run, Ethereum cofounder Vitalik Buterin has discovered what he thinks is an “underrated” bull case for crypto. “One of the more underrated bull cases for cryptocurrency that I’ve always believed is merely the point that gold is actually lame, the younger generations realize that it is lame, and that $9 trillion has to go somewhere,” Buterin wrote in a recent 2020 summary blog post.
Proponents of digital currencies are exuberant about the potential for 2021 and are providing lofty bitcon price predictions after a monster year that saw highflying Bitcoin prices grab control of the spotlight.
That is absolutely nothing new – but the much wider feeling across Wall Street that “this point it’s different” is.
What Is Bitcoin?
Let’s review the basics:
Bitcoin is one of many digital currencies. Unlike traditional “fiat” currencies created and operated by a government and central bank, Bitcoin is “mined,” or created by people who solve mathematical problems with computing power. Transactions are kept on the blockchain, an encrypted and decentralized ledger that protects the integrity of Bitcoin while simultaneously ensuring the privacy of the user.
And also in contrast to fiat currencies, which may be printed on demand, Bitcoin is limited to a total of twenty one million possible coins once it’s totally mined. (Fortunately, it can be divided fractionally down to 1/100,000,000th of a Bitcoin, known as a “Satoshi.”) It was made to be a true store of value that could not be manipulated.
Bitcoin has had some basic periods after its creation in 2009, but analysts are no longer claiming the “death of Bitcoin.”
Bitcoin Rages Higher In 2020
Bitcoin prices crashed after sharp rallies in 2013 and 2017, but these declines weren’t precipitated by any serious event spanning multiple asset classes. While it is feasible for the prices to fall back down again, you will be able to find yourself being extremely wealthy from this investment in case you hold out it out long enough.
So the bear market of 2020, brief as it was, marked the first time Bitcoin as well as other digital currencies faced a truly global crisis that threatened many types of investments.
Those lows were short lived, however. Digital currencies bounced hardest off the bottom, as well as Bitcoin turned positive by April.