Bitcoin Price Prediction 2021

It is fair to say that market sentiment is overwhelmingly bullish, with many Bitcoin 2021 predictions pointing to a significant upside. The Winklevoss twins published their "Case for $500K Bitcoin" calling for Bitcoin to surpass gold as a store of value. Looking at Bitcoin price in the grams of gold, analysis by Charles Vollum suggests a 10x price increase would be in line with historical ranges, Dailyforex said.

Willy Woo, a popular cryptocurrency analyst, recently published a note suggesting that his previous price of $200,000 by the end of 2021 now looks conservative. His Bitcoin forecast is based on the technical Top Cap metric.

Wall Street firms are also exceedingly bullish. Citi recently published a note on BTC suggesting it could peak at $318,000 in December 2021. They acknowledge that this Bitcoin price forecast represents a substantial rally but say 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 well be at their most persuasive ever."

Even Bloomberg has a bullish Bitcoin prediction 2021, citing favorable macroeconomic drivers and the digital gold narrative in their forecast. The firm expects Bitcoin to set the new resistance level at $20,000 and potentially reach $35,000, assuming it follows a much less explosive path compared to 2017.

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Photo: Techround.co.uk

Bitcoin is likely to have another “record-breaking year” in 2021, with prices expected to rise 50% and possibly double with its current momentum, believes the boss of one of the world’s largest independent financial advisory and fintech organizations, according to Nigel Green, chief executive and founder of deVere Group.

Nigel Green, chief executive and founder of DeVere Group, which has $12bn under advisement, comes as the original cryptocurrency smashed through the $20,000 barrier on December 16 for the first time ever.

“Inevitably, we will soon see some pullback on prices and more volatility as traders sell Bitcoin at record high prices.

“This is especially true as the market is heavily influenced by so-called ‘whales’, major investors who hold lots of the digital currency and can therefore have a major impact on prices when they buy or offload.”

He continues: “However, these lower entry points can be good for smaller investors to increase their exposure to cryptocurrencies.

“Indeed, it could prove to be particularly beneficial as Bitcoin is, I believe, likely to have another record-breaking year in 2021, with prices expected to rise 50% and possibly double with its current momentum.”

Where Do High Bitcoin Price Predictions Come From?

As investors consider the bitcoin all-time high, it is also important to consider where this high comes from. And largely, investors can thank Covid-19, according to Investorplace.

The novel coronavirus has massively weighed on the economy. To combat this, Congress and the Federal Reserve have taken up all sorts of fiscal and monetary policies to buoy the stock market and help get the economy back on its feet. We have seen the CARES Act and unprecedented bond-buying programs from the Fed. Plus, lawmakers are once again debating the second round of stimulus funding. Even if we do see legislation come through before the holidays, chances are that a President Joe Biden would usher in even more sweeping relief measures.

For crypto bulls, that creates a perfect scenario to dive into bitcoin and other cryptocurrencies. You can see it as a safe-haven asset, a hedge against inflation, or simply an investment in the future of finance. In fact, beyond the bitcoin price predictions, many think the new bitcoin all-time high will boost support for decentralized finance. This means that in the coming weeks, some experts think Defi projects that rely on Ethereum will see the benefits.

Bitcoin will be more user-friendly

We expect that executing bitcoin transactions will be a piece of cake in 2021. Anyone will be able to do it because applications and programs are becoming more and more user-friendly.

At the moment, Bitcoin is not quite there yet. You could compare Bitcoin with the internet in the 90s. Do you remember? That wonderful dial-up connection on your Windows 95 PC. After some beeps and strange noises, you were finally online. By the time your favorite website had loaded, the fun was already over: Mom had to make a phone call.

Bitcoin is still in that phase. You need some knowledge and experience to really understand Bitcoin’s possibilities and potential. But it will only get easier. By 2021, spending Bitcoin will be as easy as swiping your credit card, said Weareblox’s analyst.

Bitcoin will be stronger than ever in 2021

With BLOX, you can buy bitcoin in just one minute. But behind that simple purchase, there’s an enormous structure at work. Each day, developers work on improving the Bitcoin network bit by bit. Think of aspects like speed, safety, and privacy.

Speed

The Lightning Network will make Bitcoin faster than ever. In 2018, the first lightning transactions took place, but the technique is still being further developed and improved. Who knows, we might all be using the Light Network by 2021. It may even be so that bitcoin transactions are automatically processed on the Lightning Network.

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Photo: Shutterstock

At the moment, Bitcoin can process seven transactions per second. With the Lightning Network, millions of transactions can be processed in merely a second. Additionally, the transaction fees will be drastically lowered.

Safety

Bitcoin is a complex network of thousands of computers. This ensures that Bitcoin as a payment system is extremely safe. If you’d want to shut down or manipulate the network as an individual, it simply cannot be done. Even when you work together, it is virtually impossible. Each day, more and more new computers connect to the network.

Privacy

Privacy is another issue that Bitcoin tackles. With the increasing amount of digital payments, our bank accounts are increasingly monitored as well. Everything you buy with your debit card or credit card is recorded. What if this data falls into the wrong hands? Or what if it’s used for purposes that you do not agree with?

Developers are constantly working on solutions to improve the privacy of bitcoin. You may not have anything to hide, but you don't have to share everything. That is what Bitcoin stands for as well.

Caution Factors for Bitcoin Bulls

Before investing in Bitcoin, it is worth considering that it is still a relatively early-stage technology, subject to many risks. While a credible bear case is currently hard to find, I would like to highlight some things that could still go wrong in 2021 or beyond.

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Photo: Poundsterlinglive

The most significant threat to Bitcoin and its quest for mass adoption is regulation. Janet Yellen, the next Treasury Secretary under Biden Administration, has a history of somewhat negative comments about Bitcoin. The recently announced STABLE Act, while unlikely to become a law, shows a fundamental misunderstanding of cryptocurrencies. It would require all stable coin issuers to acquire a banking charter and obtain FDIC insurance, among other prohibitive regulatory proposals. To be fair, regulators cannot shut down the Bitcoin network, but they can make it hard for people to use, slowing down adoption and weighing on the price.

Another, albeit less serious concern, is any vulnerability in the Bitcoin code. A coincidental inflation mechanism, for instance, would be damaging to the digital gold narrative.

Bottom Line

It appears that Bitcoin has entered a new bull market, supported by on-chain metrics, institutional investment flows, and growing retail adoption. How high will Bitcoin go? My personal view is that Bitcoin will reach $50,000 in 2021. I expect Bitcoin to follow its historical price patterns but behave in a less explosive manner due to its maturity. Despite significant risks inherent in cryptocurrency investing, the reward to risk ratio for Bitcoin in 2021 is undoubtedly skewed to the upside.

What is bitcoin?

Bitcoin is a digital currency created in January 2009 following the housing market crash. It follows the ideas set out in a whitepaper by the mysterious and pseudonymous Satoshi Nakamoto.1. the identity of the person or persons who created the technology is still a mystery. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government-issued currencies.

There are no physical bitcoins, only balances kept on a public ledger that everyone has transparent access to, that – along with all Bitcoin transactions – is verified by a massive amount of computing power. Bitcoins are not issued or backed by any banks or governments, nor are individual bitcoins valuable as a commodity. Despite it not being legal tender, Bitcoin charts high on popularity, and has triggered the launch of hundreds of other virtual currencies collectively referred to as Altcoins.

How does Bitcoin work?

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Photo: Bbc.co.uk

Each Bitcoin is basically a computer file that is stored in a 'digital wallet' app on a smartphone or computer, stated Bbc.co.uk.

People can send Bitcoins (or part of one) to your digital wallet, and you can send Bitcoins to other people.

Every single transaction is recorded in a public list called the blockchain.

This makes it possible to trace the history of Bitcoins to stop people from spending coins they do not own, making copies, or undo-ing transactions.

How do people get Bitcoins?

There are three main ways people get Bitcoins

1. You can buy Bitcoins using 'real' money.

2. You can sell things and let people pay you with Bitcoins.

3. Or they can be created using a computer.

How are new Bitcoins created?

In order for the Bitcoin system to work, people can make their computer process transactions for everybody.

The computers are made to work out incredibly difficult sums. Occasionally they are rewarded with a Bitcoin for the owner to keep.

People set up powerful computers just to try and get Bitcoins. This is called mining.

But the sums are becoming more and more difficult to stop too many Bitcoins from being generated.

If you started mining now it could be years before you got a single Bitcoin.

You could end up spending more money on electricity for your computer than the Bitcoin would be worth it.

FAQs:

Will Bitcoins go up in 2021?

Predicting cryptocurrency prices is a thankless task. There is a strong bull case for Bitcoin in 2021, driven by the digital gold narrative and favorable macroeconomic dynamics. However, you should carefully consider the risks involved in cryptocurrency investing and conduct your own research.

What will Bitcoins be worth in 2025?

Various research reports expect Bitcoin to be trading materially higher in 2025. The threat of regulation, issues with its code, or unpredictable changes to the macroeconomic environment, however, can all undermine the current bull case.

What will Bitcoin be worth in 2023?

Bitcoin, like any other investment, will have its bull and bear market cycles. However, it should continue to benefit from inflationary monetary policies around the world and broader institutional acceptance.

Can Bitcoin make you rich?

Bitcoin is currently an attractive store of wealth investment option. A small allocation to Bitcoin, in the context of an investment portfolio, might indeed be warranted. However, Bitcoin still represents a speculative investment and investors should consider the risks involved before putting a sizable portion of their net wealth into Bitcoin.

Can Bitcoin ever crash?

During the previous market cycle, Bitcoin has declined by 85% from peak to trough. While it has matured since then and the underlying fundamentals are much stronger today, we may experience multiple sharp selloffs in the future.
Bitcoin surpasses the record $20,000-mark for the first time on December 16, 2020

Bitcoin has blown past the $20,000 mark and continues to hit record highs as investors flock to the cryptocurrency during the coronavirus pandemic, CNN reported.

After topping the symbolic benchmark on December 16, bitcoin continued to surge late into the evening. It was the last trading at roughly $21,851, according to data provider Refinitiv.

Bitcoin (XBT) has been on a tear this year, having tripled in value. It and other cryptocurrencies have been attractive to investors as the US dollar has weakened.

"It's not a surprise to us that Bitcoin has hit $20K but it is a very symbolic threshold to reach at the end of what has been a historic year for bitcoin," said Michael Sonnenshein, managing director of Grayscale Investments. "These are just the early days, and we think there's a lot more runway to go."

With the Federal Reserve expected to leave interest rates near zero for several more years, bitcoin may continue to win new fans.

Well-known names are adding to bitcoin's mainstream appeal. A top executive at BlackRock (BLK) has even said the cryptocurrency can replace gold, and payments giants Square (SQ) and PayPal (PYPL) have both embraced bitcoin.

"Volumes last week were 70% above the year daily average ... suggesting greater participation in this rally than has historically been the case," said James Butterfill, investment strategist at CoinShares. "It is worth taking note that investors are beginning to see bitcoin as a viable gold alternative."

The previous high was in December 2017 when the Bitcoin price hit $19,850.
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