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Bitcoin Surges Above $34,000: A New Record For The Cryptocurrency Giant

Bitcoin, the most expensive digital currency, hit a record high above $34,800 on Sunday, January 3, 2021. With the newly recorded value, its value has tripled in the past year and the cryptocurrency is evolving to become a mainstream payment method.

On Saturday, Bitcoin climbed above $33,000 which was the highest record until a new record was set just a day after, on Sunday, on the 12th anniversary of its establishment. Only on December 16, 2020, the cryptocurrency had broken through $20,000 per bitcoin level and now with this dramatic upsurge Bitcoin has added an escalating 800% since mid-March. 

Marcus Swanepoel, chief executive of Luno, a London-based cryptocurrency platform, said, “Even the most bullish of bitcoin advocates could not have foreseen such a meteoric rise in price in such a short space of time.” History suggests a small pullback could follow, he added.

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“But the pattern we’ve seen in the build up to this milestone – a consistent increase, rather than one sharp spike – sets bitcoin up extremely well for this year,” said Swanepoel. He also speculated that “something approaching the $100,000 mark before the year’s end” was possible.

“The number keeps going up as the market has seemingly never been more bullish,” said Paolo Ardoino, the chief technology officer of cryptocurrency exchange Bitfinex. “We see a very bright future ahead for all bitcoin holders.”

Investors have been drawn to the digital currency as the US dollar has been at its lowest level since spring 2018 and the Federal Reserve anticipated to leave interest rates near zero for several years. There is a growing assumption amongst investors that the cryptocurrency could act as a store of wealth amid rampant central-bank money printing in the last year to support economic recovery from the Covid-19 pandemic. 

“Some will argue that there is more to come from both gold and bitcoin, especially if governments keep piling up debts and central banks do their best to fund that burrowing through the backdoor with quantitative easing, zero interest rates and bond yield manipulation, thanks to the scarcity value relative to cash,” said Russ Mould, the investment director of AJ Bell, one of the UK’s largest investment platform. “Others will argue neither gold nor bitcoin have intrinsic value, as they do not generate cash,” he added. 

Bitcoin’s value has been highly volatile over the years. In 2017, it soared from around $1,000 to over $19,000 but by early 2019, the value plunged down to just over $3,000. However, coming to the first few days of 2021, the value has risen drastically to above $34,000.

The rise in the value of the cryptocurrency has been catalysed by certain factors like PayPal’s decision to allow its users to use the cryptocurrency and big-name investors investing in the cryptocurrency. 

Bitcoin surpasses Visa’s $511 market cap and nears Tesla

With the new record set on Sunday (Jan. 3), Bitcoin’s market value is now more than $600 billion. The most popular virtual currency – Bitcoin has overtaken credit card giant – Visa’s $511 billion value and is closing down to electric car company – Tesla’s $688 billion. 

With its recent surging rally, Bitcoin is expected to overtake Facebook, Google, Microsoft and Apple too. 

Marc Bernegger, bitcoin pioneer and member of the Board of Crypto Finance Group, said, “The massive price increase of bitcoin since Christmas might be just the beginning of the next upward cycle for digital assets. Compared to the past there are not mainly retail investors buying into digital assets but more and more institutional investors who look at bitcoin as a new and emerging asset class.” 

Further, he added, “I would not be surprised to see a healthy short-term correction after reaching several new all time highs in just a few days but due to the massive demand from professional and non-speculative oriented investors I am still quite positive for the mid-term and especially long-term.”

Ryan Selkis, the founder of crypto data company Messari, predicts that bitcoin will be worth $150,000 per token by the end of 2021. 

Should Selkis’s prediction turn true, bitcoin will attain a market cap of $2.7 trillion outshining Facebook’s $778 billion, Google’s $1.1 trillion, Amazon’s $1.6 trillion, Microsoft’s $1.7 trillion and Apple’s $2.3 trillion.

However, he warned prospective investors to “have a plan and stick to it because otherwise your emotions will take over” in case the bitcoin price suddenly declines.  

Cory Klippsten, the chief executive of the bitcoin-buying app Swan Bitcoin, said, “My view is that one bitcoin will be worth more than $1 million this decade. I have no idea of the path it will take to reach that level, though, and I would warn you against listening to anyone who says they do.”

Klippsten also cautioned future bitcoin investors to do their research beforehand. He said, “As always you’re better off investing in the things you know, bitcoin is no different. The amount of value people choose to store in the bitcoin protocol is generally correlated with their understanding of bitcoin. If you buy a lot of something you don’t understand, you’re much more likely to buy high and sell low. So think about buying some bitcoin as part of your education process, rather than as placing a trade in the hope of quick profit.”

Image: Pixabay

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