The cryptocurrency landscape has been obsessed with the infamous Winter 2017 bull run, but as bitcoin has surpassed its ever-high price of $ 19,655, the crypto world may be venturing toward uncharted territory.
There are many factors that went into the mix in creating the right environment for bitcoin to surpass its peak in 2017. In the wake of the COVID-19 market crash in spring 2020, BTC fell to about $ 5,000 seconds before hope of strong recovery drive fresh. investment. The Bitcoin movement was further strengthened later in the year by the news that PayPal would provide for the purchase and sale of the cryptocurrency, as well as uncertainty experienced in the US presidential election.
But what happens next? Bitcoin in recent weeks has recorded a sharp rise in value, gaining as much as 45.8 percent in just one month and crossing an always-high price, per numerous exchanges. But is the increase sustainable? Or will the world’s most popular digital asset come back to earth?
Building on Market Capitalization
Significantly, bitcoin’s market capitalization has grown alongside its snowball price tag. The bitcoin market cap surpassed its own high mark on November 17, 2020. The growth of bitcoin market capitalization has been so astronomical that it has now surpassed the likes of PayPal, Netflix, Coca-Cola and Disney to sit among the top 18 companies largest commercial in the world.
The larger the market cap, the more sustainable a significant price run is likely to be. This latest boost to bitcoin market capitalization has been driven by significant investment from companies like Square and MicroStrategy, as well as the increased levels of accessibility provided by PayPal making the digital currency available to its fund users 286 million strengths.
In another boost to bitcoin’s appeal, the cryptocurrency’s supply is being squeezed following its halving event earlier in 2020 – this is because less bitcoin is being released as a mining subsidy per block.
Changing Investor Behavior
Following the 2017 bitcoin rally, a significant crash occurred in which the crypto market spent much of the following two years picking itself up. However, today’s investor behavior appears to be different from 2017’s behavior.
As the chart above indicates, bitcoin has become a much more popular asset for investors in the run up to 2020. More wallets that typically buy and hold cryptocurrencies are turning to bitcoin as a safe haven of crypto, while that fewer cryptocurrency wallets are participating in high trading volumes.
The chart also shows that there is a correlation between slowing stockholder accumulation and the fall in the value of bitcoin. More long-term investment should mean more stability and sustainability in terms of growth, and as we will see, there is no indication that long-term BTC investment is slowing down at present.
The current landscape also has a significant number of high-quality, reliable crypto exchanges that have emerged since 2017. This has further helped drive the growth and confidence of newer investors in a way that can help protect bitcoin’s long-term trajectory.
Preparing the Way To The Moon
“Back in March, I predicted that BTC could reach $ 50,000 by the end of 2020 and there is now growing evidence of that upward trend,” said Antoni Trenchev, co-founder and managing partner of the Nexo crypto platform, while speaking with Decrypt. “Markets as round numbers – Bitcoin passed $ 16,000, then $ 18,000 in a matter of days. The next stop is $ 20,000, ”
“$ 50,000 by the end of this year is not at all unlikely,” he continued. “This will be a record not driven by a frenzy, but by the big, progressive, finance and technology-saving organizations that will push crypto into the mainstream.”
Could bitcoin be going to the moon? Some commentators claim the cryptocurrency will hit $ 300,000 within a year, fueling speculation that this could be a pivotal moment in mainstream adoption of bitcoin.
According to a Citibank report revealed, a future bitcoin rally could “peak in December 2021 … Suggest move as high as $ 318,000.”
“It seems unlikely though that it would only be a low to high rally of 102 times (the weakest rally so far in percentage terms) at a point where the arguments in favor of bitcoin could be at their most persuasive ever , ”The report claimed,“ Bitcoin: Gold 21st Century, ”claimed.
The Risks of Volatility Remain
However, investors must be aware that while the outlook seems promising around bitcoin, the world of cryptocurrencies is punctuated by spectacular rallies before devastating losses occur.
According to FortuneLedger’s newsletter, “the short answer is that a collapse is almost inevitable – 400% rising assets need to be corrected.” However, the article noted that the future collapse will not be nearly as severe as before, due to the size of the investment in the currency. The article concludes that this could mean that a future correction could leave bitcoin at around $ 8,000 – rather than $ 2,000 – indicating a potential area for new investors to wait for before buying.
Today, bitcoin is looking stronger than ever, so it’s perfectly in character for cryptocurrency commentators to be predicting moon launches to over $ 300,000 as well as crashes toward $ 8,000 in the same calendar year.
As the world’s most famous cryptocurrency surpasses its ever-high price, it will enter uncharted territory. But with the support of high volumes of long-term investors and the support of huge multinational corporations, the 2020 bull run may well end the longing of the 2017 millionaire-making chaos.
This is a guest post by Peter Jobes. They are solely their own opinion and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.