Six Reasons Why Bitcoin Will Exceed $ 100,00 Mark in 2021
Bitcoin all-time highs, predicts that Bitcoin will exceed the $100,000 US dollar barrier this year have become louder. What are the reasons for such a bold price prediction?
Since returning from its summer hiatus on October 1, Bitcoin has been looking for new highs.
However, there is still a long way to go before this brand reaches its long-awaited US $ 100,000 pricing point, which would require a little more than a 40% price increase.
However, Bitcoin’s history has demonstrated that rapid development in a short time is possible.
Bitcoin has gone through stages of market cycles in which it experienced price surges like a hockey stick. Consider the well-known ICO craze towards the end of 2017.
Between October 15, 2017, and December 15, 2017, the Bitcoin exchange rate soared from roughly USD 5,500 to around USD 19,500 in less than two months.
Such gains are no longer projected, although hikes of 40% by the end of the year are certainly possible.
1. Bitcoin ETFS Give the Market a Boost
Even if the Bitcoin ETFs authorized in October should be treated with caution — as we have shown in our analysis — the major implications on the Bitcoin price are undeniably favourable.
This has been interpreted by the crypto market as a vote of confidence from governments and institutional investors, who have assured record inflows of capital into what is commonly regarded as the top class of equities.
These inflows of capital do not account for the rapid surge in Bitcoin’s price so far, but the introduction of ETFs has bolstered the bullish market dynamics.
For institutional and private investors who are hesitant to invest in tokens and wallets, the barrier to entry into Bitcoin has therefore been dramatically decreased.
2. Inflation Is at Its Highest Level in 30 Years
The fact that inflation is skyrocketing should also help the Bitcoin story. Some investors regard the cryptocurrency, which is restricted to 21 million units, as digital gold and hence as inflation insurance.
As a result of the flight from monetary values, some money should be directed to digital material assets. On November 10, the day after the US inflation data were released, the Bitcoin price soared to a new all-time high.
Consumers in the United States are facing the greatest inflation rate since 1990, with a 6.2 per cent increase over the previous year.
A speedy catching of inflation is improbable due to never-ending supply chain difficulties and constantly rising energy prices.
Even the US Federal Reserve’s tapering — that is, the tightening of its expansionary monetary policy — is unlikely to result in a quick fall in inflation.
With the forthcoming Bundesbank report, inflation in Germany, which is now at 4.5 per cent, is expected to grow rather than reduce.
As a result, the pressure on investors to invest in scarce assets is increasing, and the odds of more billions flowing into Bitcoin are increasing.
3. Political Risks Have Been Significantly Mitigated
One of the biggest threats to Bitcoin and the broader crypto sector is government regulation.
Bans on bitcoin, such as the one enacted in China in May of this year, can have a significant impact on digital assets.
However, since the United States and Europe have already said that they would not impose any Bitcoin sanctions, more negative news is becoming increasingly unlikely.
Overregulation, which is currently in place and is expected to become more so in the coming months, does not have to have a negative impact on the pricing of digital assets.
As important as the states’ limited approach is to be evaluated, it does not have to be detrimental to the courses.
As a consequence, new groups of investors, particularly institutional investors, can be won over.
States that adopt Bitcoin as their official currency, on the other hand, may see further exchange rate fluctuations. So yet, only El Salvador, a small Latin American country, has adopted Bitcoin as its legal currency.
If additional countries follow suit in the next months, the Bitcoin rate will benefit greatly.
4. The Network Data Is in Favor of the Bulls
When it comes to the Bitcoin network’s technical indicators, they, too, portray a positive image. Since China’s prohibition on Bitcoin mining, the hashrate has been rapidly rebounding.
Given the current surge in hashrate, the price of Bitcoin is projected to reach a new all-time high this year. The network is as solid and secure as it has always been.
In recent months, the number of nodes, or network nodes that are also responsible for transaction processing and network security, has risen dramatically.
In recent months, the number of nodes, or network nodes that are also responsible for transaction processing and network security, has risen dramatically.
The expansion of the Lightning network has also been a success. In terms of nodes and transaction throughput, the second-layer scaling solution is also rapidly expanding.
Additionally, this weekend, the taproot upgrade for Bitcoin will be implemented, which might give additional benefits.
5. Stock Exchanges Vanish
If demand stays the same or rises, the law of supply and demand applies: the lesser the supply, the higher the price. This market dynamic is reflected in the equities traded on the exchanges.
As wealthy investors or custodians withdraw and “store” Bitcoin from the market, less and fewer Bitcoin are freely available on crypto exchanges.
Stock Market Screenshot
If this pattern continues, there is a danger and possibility of short-term price surges. The inverse of panic on sales can result in panic purchasing, which can result in price bubbles.
6. A Timely Outbreak Is Predicted Using a Stock-To-Flow Model
The stock-to-flow model is the most often used methodology for projecting Bitcoin prices (S2F). Even though their informative usefulness is restricted, such models can nevertheless be useful as a guide.
In any event, Bitcoin has performed admirably thus far. We’d have to break the $100,000 US dollar level this year, according to the STF’s creator, who goes by the alias Plan B.
According to the S2F model, we are nearing the conclusion of a cycle characterized by Bitcoin Halvings — halving of Bitcoin block emissions, among other things — as can be seen from the colours in the screenshot.
As a result, expect a rapid rise in the short term, followed by an exaggeration and eventual adjustment before a new cycle begins.
Raoul Pal: In a Roundabout Manner, $100,000
Raoul Pal, a former Goldman Sachs banker and Bitcoin promoter, is regarded as a leading crypto-market analyst.
He believes that we will not be able to achieve $100,000 in Bitcoin immediately. The markets, he believes, prefer to take the “route of greatest misery.”
Raoul Pal expects the uptrend to last until June 2022, rather than a quick jump to $100,000 in the following two months.
This means that high volatility ensures quick rallies, which are followed by quick corrections. Pal expects the Bitcoin rate to reach above $ 250,000 in the coming year as a “prize” for his worry.
Perspectives on Bitcoin
Neither Raoul Pal nor the stock-to-flow model can anticipate the Bitcoin rate with any degree of accuracy. However, there are several compelling factors in favour of a rapid increase in Bitcoin values.
To put it another way, the possibility of price increases is growing rather than decreasing at the moment.
Statements on trends are more valuable than precise course aims since the causes are never monocausal, but rather chaotic and heterogeneous.
Market sentiment, spurred by celebrities like Apple CEO Tim Cook and, of course, Elon Musk, may produce unexpected market dynamics.
Blockchain games, NFTs, and decentralized Metaverse initiatives are all examples of crypto innovations that indirectly help the main currency gain from the crypto economy.
Unforeseen occurrences, on the other hand, might occur at any time and derail all projections.
Whether it’s the fall of the stable coin Tether or a global economic and financial catastrophe, all asset classes are heading south.
As a result, it’s quite doubtful that we’ll be celebrating Christmas with a 6-digit Bitcoin rate. However, we will only truly understand when the moment comes.
Conclusion
Every new Bitcoin trader must familiarise with the many trading strategies, methods, and styles that are now available. Choosing the best trading strategy can mean the difference between making money and losing it. In the year 2021, you can still make more money from the Bitcoin market if you know how to make the right decisions. The market research gives you the tools and information you need to create the greatest decisions possible.
