The number one cryptocurrency by market capitalization Bitcoin has shown superiority again over all other assets. In the past few days, BTC has set several new all-time highs. It doesn’t look like it will back off anytime soon.
The upward run of the crypto coin has been credited to a surge in interest from larger institutions. More importantly, the currency’s perceived appeal as a hedge against inflation that could follow massive government spending in the U.S. is one reason investors have continued to root for BTC.
Bitcoin has grown by over 220 percent this year currently trading at $23,086. Bitcoin was priced around $7,000 – $9,000 in January 2020.
However, historically, BTC is known to experience sharp drops even amidst serial bull runs. In 2017, it crashed by 70 percent after hitting an all-time price back then. The crash remains fresh in retail investors memory.
BTC’s recent surge gathered momentum after PayPal said it would allow Bitcoin’s use on its network. A number of large firm made significant Bitcoin investments recently to boost overall demand.
Bitcoin surge, why this surge is different from previous rallies
Largely, the direct answer, according to analysts, is that the industry and the crypto market has matured over the last three years.
“The main difference between now and the 2017 rally is that back then the market was driven by retail speculation and now it’s being driven by corporations and billionaires,” said Mati Greenspan, portfolio manager and founder of Quantum Economics.
Wall Street incumbent Fidelity, for instance, set up a new unit to let its clients invest in digital assets. At the same time, PayPal recently started letting its U.S. users buy, hold and sell a range of virtual currencies.
And there are now big-name investors putting their money into Bitcoin, including billionaire hedge fund managers Paul Tudor Jones and Stanley Druckenmiller.
Similarly, Alex Mashinsky, CEO of Celsius Network, said in an interview that most people already know what Bitcoin is, and they’re just continuing to accumulate. He pointed out that it makes all the difference.
Also, the Bitcoin halving occurred earlier this year and its effects become more outspoken. The halving saw the amount of Bitcoins rewarded to miners get cut in half. Analysts say this event has also contributed to the asset’s climb in 2020.
Next price level for BTC?
In Mashinsky’s interview, he predicted that Bitcoin would hit the $400,000 and $500,000 soon. He explains that if Hodlers continue to sit on their coin and scarcity and demands remain high, the crypto would defiantly hit that level.
However, he said BTC would trade at $20,000- $25,000 by the end of the year. He predicted the average price for BTC next year would be around $30,000 and $50,000.
Do you agree with Mashinsky’s outlook for Bitcoin over the coming years? Let us know in the comments below!