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A decade ago, Bitcoin was launched by a pseudonymous person or a group, and since then, it turned out to be the greatest and the world's most valuable cryptocurrency. Bitcoin has remained in the shadows until its great breakthrough in 2017. Even though the gains were lost after the short win, the crypto continued to soar based on investors' trust in BTC, despite its volatility. The rise in bit coin value in 2020 has led to several analysts believing that it was Bitcoin's third-largest price rally in its history of existence. But investors are talking more about Bitcoin's performance in 2021 rather than any other year. With increased national institutional adoption, Bitcoin has currently changed the face of the cryptocurrency industry. Investors use BTC as a hedge against inflation and are treating it as digital gold.
This year, Bitcoin's journey began as the crypto started its price rally from US$55,000, and did not look back since then. It once reached around US$66,000 to US$68,000, and that's when market analysts started predicting that the crypto might reach US$70,000 by the end of the year. Instead, Bitcoin dived down and entered the cold phase. BTC is now hovering over the US$48,000 mark.
As the number of investors in the crypto market is increasing daily, the idea of market volatility is slowly fading. Many investors treat Bitcoin's volatility as a game, but it is also tough to deal with for several other investors.
The rise of covid cases, along with the central banks becoming more vigilant due to fear of inflation is driving instability in all financial markets. In an industry as new as cryptocurrency, causing a massive price swing is not too tough. Moreover, new short-term investors who are selling their holding in reaction to the dive in bitcoin's price value are contributing to Bitcoin's fall as well. Besides, there might be a host of combined reasons, like new interests in altcoins, a negative remark from some celebrities, and others that have also led to the crash in Bit coin prices.
Apart from Bitcoin, other cryptocurrencies are also being adopted by customers and business institutions for daily transaction operations. Currently, Bitcoin adoption is rapidly growing at a rate of 113%. At this rate, the number of BTC holders will grow at an exponential degree that will drive its price value to a great extent.
Many experts believe that Bitcoin will not reach more than US$50,000 in Q1 of 2022, and several others believe that the crypto will march towards all-time highs by the end of February next year. However, the volatility of BTC is most prominent in January, and it is expected the large Bit coin buyers will make massive moves as the crypto's price will retrace. So, Bitcoin's crash and rise are completely dependent on the investor's moves, early in the year.
The newness of cryptocurrency and its lack of traceable history is one of the major reasons behind these price swings. Potential and existing investors should understand the price fluctuations are a part of investment and that they should only invest if and when they are ready to risk their valuable money. It is quite clear from the current situation that Bitcoin's price is suffering due to abnormal conditions in the financial market. However, the future is quite bright for Bitcoin investors with its growing popularity.
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Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.
