Starting the year off with less than $30,000 in January, Bitcoin first reached an all time high in 4 months, valuing $65,000 in April, before dropping to below $50,000. On November 10, Bitcoin reached it’s all time high of $68,521. However, before the end of the month, it dropped to less than $54,000.
Bitcoin is a very stable coin and overtime, it has been steadily increasing in value. With the swift variation in the way it started the year and it’s current price, experts say that it is only on it’s way to hitting $100,000.
Though some experts are quite conservative on giving a specific time for it to reach that limit, some predict the first quarter of 2022 or even earlier. Majorly, most experts focus is on the fact that the coin has proven to be increasing over time and is more predictable for investors to venture into.
Factors That Affect The Price Of Bitcoin
Several factors may be responsible for the volatility and changes in price of Bitcoin. Some of them include:
The Demand and Supply For Bitcoin
Currently, there are about 18 to 19 million Bitcoins in circulation. There is a constant supply but an ever increasing demand. The mining of Bitcoin was designed to be produced at a constant rate and to reduce over time, this scarcity influences the price of the coin.
In addition, in the past one year, about 17 million additional people started to invest in cryptocurrency. This most likely has contributed to the surge experienced in Bitcoins price. If you also want to join the ever-increasing chain of people who are investing in cryptocurrency, you can check out the Bitcoin Loophole website. The interface is easy to use amd understand for beginners and advanced investors.
Despite being the face of cryptocurrency, the reality is that Bitcoin is now accompanied by several other cryptocurrencies. These coins have ovetime reduced the percentage of trades and investment in Bitcoin. For instance, Ethereum has posed a significant competition for Bitcoin, accounting for about 18% of the total market cap in the last one year.
This competition though has reduced the percentage of market cap on Bitcoin, the sevral new coins however have increased the participation of people in cryptocurrency and indirectly increased awareness of Bitcoin.
The cost of mining Bitcoin plays a significant role in it’s price. It involves large electricity bills, infrastructure costs and physical and mental laobor cost. Research has it that the price of Bitcoin in the crypto market is very close to its production cost. Hence, the harder the cost of production, the higher the price of the coin.
Just as much as there is a possibility that Bitcoin would reach a total of $100,000 for each, some experts say that it is important to not totally close an eye on the possibilities of it experiencing a dip and getting below $30,000. For instance, we have been able to establish that like every other product, an increase in demand and a fixed supply amounts to scarcity and therefore leads to an increase in value or price of the product.
Having considered that, research has also shown that other competing coins like Ethereum, Solana, BNB, ADA and several others have gained increased relevance in the past one year. This has particularly reduced the market cap on Bitcoin. As at November, the market cap on Bitcoin dropped to as low as 50%. By interpretation, it means that the demand for Bitcoin is somewhat reducing and within a year or less, we might be expecting a great dip.
Being a volatile coin, the price of Bitcoin may vary from day to day in either an ascending or descending order. Whether there would be a dip or another surge before the year runs out is not ours to say. However, you can be guaranteed that, even if it dips, it will definitely rise again and someday reach the $100,000 hallmark.
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