While it has many ups and downs in recent years with the high volatility of Bitcoin, where the best example is the year 2020. The price was only around $5,500 in the first quarter, while it started breaking records at the end of the year. The current value of this cryptocurrency is around $50,000. Various factors are influencing the value of cryptocurrencies on the market. When it comes to the market, it is getting more and more popular over time, especially because of the BTC and other popular options that are on the rise as well, such as Litecoin, Ethereum, Ripple, and more. You can click here to learn more about BTC trading.
Also, we have to mention the advantages that the global economy and various industries can have from implementing blockchain technology. For example, there is a great benefit of using decentralized cryptocurrencies since you can avoid expensive fees when making transactions. The security is much higher as well. On the other side, the main reason why people are interested in buying coins and tokens is that many of them have a great potential to become more valuable over time. Bitcoin is the best example since you could make ten times more than your investment if you bought it only a year ago.
Moreover, it is very important to learn about different factors that are affecting the prices on the market. These factors are related to supply and demand, economic situation, technical features, official regulations, and more. In this article, we are going to analyze more about the main reasons why Bitcoin price is so high at the moment.
1. It Became Widely Accepted
While there were many misconceptions related to Bitcoin in the first few years after it got released on the market, we can notice that a lot of companies starts to accept this digital currency. Big corporations like Amazon and popular platforms like eBay and Ali Express are the biggest names that are still not interested in accepting this payment option. On the other side, we can see a great expansion of businesses where you can pay by using an e-wallet. The most recent company is PayPal. Also, a big influence is caused by a huge investment of Elon Musk, who bought around $1.5 billion worth of Bitcoin recently. There are other big names as well, and they represent an important factor for the increase in value.
Another important factor is the fact that the number of BTC is limited. When the process of mining is finished, there will be 21 million of these units. Also, this process is getting more complicated over time and requires more resources. During the first few years, people could mine BTC on a basic PC. On the other side, the cost-effectiveness of this method is questionable and related to various factors like the cost of electricity, hardware, and more. Furthermore, the fact that there is a limitation is affecting the rise of value since there is a chance for this currency to become stable in the future and completely replace current payment options.
3. Positive Predictions
According to many experts, the price will probably continue to rise, which can attract even more people to invest in it. The high demand is also the reason for the sudden increase in value, and it seems that it will remain stable without any critical drops that we could see last time when it started breaking records in 2017. Large investors are investing a lot of money in BTC, which is one of the causes for the rise as well. Moreover, there is a great possibility that the world is going to face another economic crisis like the one in 2008. Investing in virtual assets represents an excellent method for the protection of funds since cryptocurrencies won’t be negatively affected by the recession.
Since people are becoming more interested in blockchain technology and the ability to use an e-wallet for payments, we can see an increase in people who are converting their fiat currencies and use e-wallets as a standard way of payment. That is very important for the stability of this currency since it will be more active in standard flows of money on the market. Also, this makes the market of cryptocurrencies much different from Forex where the risks are much higher today since there is a chance for the crash of the stock market. On the other side, the main reason why people are using digital wallets is the convenience and security. You can now transfer money to any other address without the need for a third party during the process. Therefore, it is a much cheaper option than banking services.
The Bottom Line
A lot of people are still suspicious when it comes to the price of BTC in the future. However, the fact that many big corporations are now investing in it is a clear indication that we can expect an even higher value in the future. Many countries are already planning to introduce new regulations where they could charge people with taxes on transactions made with cryptocurrencies. The best example that it is already a widely accepted option is the number of ATMs with crypto support all around the world.
For many investors, buying BTC at this moment seems too risky since they fear that there will be the same case as with the previous record-breaking rise of it, and significant fall after that. However, the current case is much more different since there are more serious investors active in this market. Some experts are even predicting that the price of it will reach the value of over $100,000 in the next few years.
Considering all of the factors that could represent an influence on the market of cryptocurrencies and the huge demand for BTC, it seems that the chances for some sudden drop in value are very low. Therefore, you could still make a profit even if you buy it these days when it is reaching new levels in value.