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Bitcoin enjoyed a remarkable year in 2021. Besides the surging BTC's popularity, other cryptocurrency-related commodities like non-fungible tokens (NFTs), decentralized applications (dApps), and smart contracts have also gained prominence. Bitcoin price touched a record high of US$68,000 in the past month with Bitcoin ETF's debut in NYSE. However, despite the ongoing adoption phase, BTC is experiencing a slump as its price is nearing US$40,000. In this article, we explore if the digital token can exceed its previous record high before the end of the year.
Bitcoin has evolved to be the talk of the town since its 2020 rally. However, things went even intense in 2021. Bitcoin price kept rising higher and higher, thanks to mainstream acceptance. Even big companies like Expedia, Microsoft, and PayPal started accepting the digital token as a means of exchange. On the other hand, the institutional investors concept is also getting prominence among cryptocurrency investors. Familiar names like Tesla and MicroStrategy are leading this change. While private organizations are on the line to gain value through Bitcoin, a central government has come up with an effective strategy to use BTC to boost its falling economy. Yes, El Salvador has recognized Bitcoin as a legal tender and the country has also come up with a Bitcoin city. The number of people using BTC as a means of payment has also raised over months. Despite the impressive improvements, Bitcoin price is still in the red. Will it manage to make a breakthrough before 2022 begins? We explore.
Similar to fiat currencies, Bitcoin price is also influenced by a number of factors like scarcity, supply and demand, adoption, government regulations, and more. Although BTC works on a decentralized model and is not pegged to any government currencies or doesn't have a link with financial institutions and banks, its price swings depend on those factors heavily.
Since its inception, Bitcoin has been gaining the attention of individual investors. One thing that changed many people's outlook on BTC is its growing institutional adoption. Besides, many new consumers have also bought and explored cryptocurrency recently. According to reports, cryptocurrency technology is adopted at a faster rate than humans first embraced internet technology. Bitcoin adoption has been increasing at an annual rate of 113%. If the adoption rate continues to grow as it is, then there will be 1 billion users by 2024 and 4 billion users by 2030.
Scarcity and the growing demand are what makes a product unique. Similarly, Bitcoin is also entrapped in a demand cycle that keeps its value afloat. The Bitcoin circulation is capped at 21 million. Currently, there are 18 to 19 million digital tokens in circulation, which accounts for over 90% of the total BTCs. This encourages a fixed supply with increasing demand. On the other hand, government regulations also contribute to its price swings. The central authorities are also coming up with disruptive ideas and new regulations to keep an eye on cryptocurrency circulations.
Finally, Bitcoin is working on its much-opposed concept, Bitcoin mining. Since the mining process consumes a lot of energy, global leaders showed dismay over it. However, the Bitcoin network is planning for updates that could counter the environmental concern remarks.
The world's largest cryptocurrency, Bitcoin, has been falling for over two months now after hitting a record high of US$68,000 in October end. Owing to the BTC's price fall, the whole cryptocurrency market lost over US$1 trillion since November. For the past five weeks, the bitcoin price has registered consecutive falls, which has driven down its price to US$46,000. At the time of writing, Bitcoin was at US$. Experts predict that Bitcoin touching the US$40,000 mark before the end of 2021 is more evitable than it surpassing the record high.
However, 2022 will be an eventful year for BTC according to predictions. The cryptocurrency will see further mainstream acceptance, which will eventually drive its price in the future.
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