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.
Competition
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.
Production Cost
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.
Conclusion
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.
Image Source: BigStockPhoto.com (Licensed)
Disclaimer
Cryptocurrency products are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.
The information on this website is provided for educational, informational, and entertainment purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose.
The information contained in or provided from or through this website and related social media posts is not intended to be and does not constitute financial advice, investment advice, trading advice, or any other advice.
The information on this website and provided from or through this website is general in nature and is not specific to you the user or anyone else. You should not make any decision, financial, investment, trading, or otherwise, based on any of the information presented on this website without undertaking independent due diligence and consultation with a professional broker or financial advisory.
You understand that you are using any and all Information available on or through this website at your own risk.
The trading of Bitcoins, alternative cryptocurrencies has potential rewards, and it also has potential risks involved. Trading may not be suitable for all people. Anyone wishing to invest should seek his or her own independent financial or professional advice.
Site Disclaimer
The Content in this post and on this site is for informational and entertainment purposes only. You should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on our Site constitutes a solicitation, recommendation, endorsement, or offer by HII or any third party service provider to buy or sell any securities or other financial instruments.
Nothing in this post or on this site constitutes professional and/or financial advice. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this post or on this site.
You recognize that when making investments, an investor may get back less than the amount invested. Information on past performance, where given, is not necessarily a guide to future performance.
Related Categories: Cryptocurrency, Reviews
