Heading into 2021, few cryptocurrency enthusiasts would have believed that Bitcoin would rise towards $41,940. With year-to-date returns in excess of 20%, barely a few weeks into January, Bitcoin has proven once again why it remains the absolute gold standard of digital currencies.
The Bitcoin chart looks more like a rocket blasting off than a mainstream digital currency which has been around for over ten years. Many BTC owners are rightly befuddled about whether to hold or sell BTC? When prices rise quickly, everyone wants to hold. When they start dropping, it gets a little confusing.
At times, it seems improbable that this digital currency can continue rising at such a furious rate. Yet Bitcoin defies expectations time and again. It may feel like a crapshoot, but Bitcoin and more specifically, blockchain technology is the way of the future.
Gone are the days of retail traders buying and selling whole units of BTC – now it’s fractional components that trade for an unmitigated fortune. Those who speculate on the direction of BTC prices might as well provide their insights on how to win at online slots at casino.com/ca – it’s such a volatile market.
The naysayers who derided Bitcoin, and dismissed it outright after the 2018 rally are left scratching their heads in stunned silence. At the time, Bitcoin rose to meteoric heights, hitting $20,000 per unit BTC, before selling off and stabilizing in the $5,000 – $10,000 range.
Buy, Hold, Or Sell Bitcoin – That’s the Million Dollar Question!
Those who HODL crypto believe that their actions are correct. Indeed, the new equilibrium point post-2018 settled in a much higher price range, allowing further growth to take root. There are an endless supply of theories about the stunning Bitcoin rebound. All of them are exceptionally bullish, with prices in a target range of $100,000 – $300,000 +.
If Bitcoin is slated to rise, this begs the question: Should everyone buy Bitcoin? Surprisingly, it is Bitcoin’s volatility that deters new entrants from participating in this burgeoning market. It is possible to lose the shirt off your back if wild price swings continue. Many so-called experts defer to traditional economic theory which talks of speculative bubbles.
But there is nothing traditional about Bitcoin. It is not governed by central banks or governments, and it is not beholden to centralised control. It exists only in cyberspace, where users on the blockchain a.k.a. nodes have access to the same information at the same time. Once these blocks are mined and added to the blockchain, the transactions are secured with cryptographic software to prevent fraudulent activity taking place. It is impossible to have double transactions with Bitcoin, and there is no need for brokers to verify transactions.
There are many reasons for the lofty aspirations of Bitcoin enthusiasts. For years, top strategists have put figures of $100,000 + on the price of Bitcoin. These calls have been shot down by mainstream finance people, citing issues of regulation, the Tulip Effect, or a passing fad.
We do know that Bitcoin is the world’s premier cryptocurrency, and that it dominates the digital currency market with an estimated 65% – 70% of market share. At time of writing, Bitcoin’s market cap was $675 billion, priced around $36,200 per unit BTC (January 15, 2021).
Now that the Cboe and the CME Group are dabbling in Bitcoin-related financial instruments, it’s hard to dismiss this cryptocurrency as nothing more than a passing fad. Many more central banks, major multinational corporations, and tech hubs are making use of blockchain technology and their electronic coins for transactions/value processing.
Ever evolving technologies are reducing the carbon footprint typically emitted from mining crypto, with breakthrough blockchain ecosystems like Ethereum switching for proof of stake mechanisms instead. Once the financial markets – banks, insurance brokerages, trading and investment houses – switch to blockchain-based technologies, it will be a fait accompli for detractors of Bitcoin.