2021 has only begun, but Bitcoin already managed to establish a new all-time high.
Related: 2020: Summing up the crypto year
On January 2, it surged $30.000. Two days later, on its birthday the price surpassed $34000. Currently, the cryptocurrency is traded at around $31.000. 2021 is expected to be a great year for Bitcoin. Before introducing some predictions, let's remember the most memorable moments of the previous year. Below we present 10 of them.
1. Scoring $10,000 for the first time in 2020
Yes, there were times when raising to a five-digit zone was a big issue for Bitcoin. On February 14, the coin managed to surge $10.000 for the first time since October 2019. Although it didn't last, recovery was expected as the crypto industry had started its expansion.
2. Having its worst decline in seven years.
In March, the crypto markets suffered a major crisis which was known as Black Thursday. In just one day Bitcoin lost 40% of its value and was at risk to fall $4000. This was a disaster for DeFi markets, which led to mass liquidations. However, Bitcoin and DeFi markets managed to face the issues caused by the global pandemic finding their own recovery ways.
3. Bitcoin Halving
May 11, 2020. The third halving took place at block 630000. Bitcoin halving is an event where the block reward for mining new bitcoin is divided in two, meaning that bitcoin miners will get 50% less bitcoin for every transaction they verify. BTC halving occurs every 210,000 blocks, which equates to a halving occurring approximately every 4 years. The amount of miners' rewards has decreased from 12.5 BTC to 6.25 BTC.
4. Increasing number of active addresses
The amount of active Bitcoin addresses has grown by 105% in 2020. BTC adoption has significantly grown this year. Data shows that the number of active BTC wallets has increased more than twice reaching 1.2 million. This means that more people began to invest in the first cryptocurrency. The number of addresses holding at least 0.01 BTC grew by over 700k.
5. Becoming more acceptable as a payment method
More businesses began accepting BTC as a form of payment In October, one of the leading platforms in international transactions PayPal announced about enabling Bitcoin and other cryptocurrency transactions within the network. This had a huge impact, as businesses accepting payments via PayPal started accepting BTC.
6. Attracting institutional investors
The growing interest of institutional investors sure is among the most crucial Bitcoin advancements in 2020. Grayscale, MicroStrategy, SkyBridge Capital, and many others find it beneficial to add Bitcoin to their stores. Grayscale now has $ 16.3 billion and MicroStrategy $1.6 billion worth of Bitcoin under its management. The latest institutional investor to acquire bitcoin is SkyBridge Capital. On December 23, the company announced trading $25 million in BTC to launch a Bitcoin fund. The sum of total investments in Bitcoin is $182 M.
7. Gaining more widely accepted status as a hedge against USD inflation
In 2020 the global economy suffered greatly because of Coronavirus. The increasing rate of inflation suggested finding effective hedges to face the situation.
8. Wrapped Bitcoin surge
Along with the DiFi boom in 2020, Wrapped Bitcoin (WBTC) gained more popularity. It is an Ethereum-based token representing Bitcoin and enabling its conversion into ERC-20 tokens. One WBTC always equals one Bitcoin's price. Currently, the market cap of Wrapped bitcoin is 2.12 Billion.
In December, the rate of burning the token was notably increased.
9. Facing scrutiny
Although Bitcoin is still facing scrutiny, in 12 years this cryptocurrency proved itself to be resilient. With Joe Biden's becoming the US president, the crypto community is wondering what his approach will be towards the industry. Despite predictions are mostly positive, Bitcoin and the crypto industry will still have to show they are effective financial tools.
10. All-time high
December 16 was perhaps the most important day of the year for Bitcoin. This very day it surpassed the price of $20000. Since then, the cryptocurrency has kept establishing new records. On the last day of the year, it was already traded at above 29000.
Predictions for 2021
Crypto traders and investors are wondering if Bitcoin's success will continue in 2021. Bullish movement is supposed not to calm down. Soon Visa will start to provide rewards in Bitcoin as it announced in December.
Considering all the factors, we can say that Bitcoin is stronger than ever. Despite some issues like volatility and regularity, experts predict 2021 to be a successful year for Bitcoin.
CEO of Galaxy Investment Partners Mike Novogratz believes despite the possible declines, Bitcoin will manage to hit $65,000 in 2021. He expects that due to its scarcity, Bitcoin will be viewed mostly as a store of value rather than a purely speculative asset.
Brian Estes, the founder of Off The Chain Capital hedge fund, predicts bitcoin could hit between $100,000 and $288,000 by the end of 2021. He said that taking into account the previous progress, going up 5X is not a big deal for the cryptocurrency.
So, the market trend is clear. Both enthusiastic and cautious investors are predicting major gains for Bitcoin in the next two years. The cryptocurrency is supposed to reach new highs and stabilize at higher prices after its falls. Let's wait and see which expectations will come into reality?