Bitcoin’s Price 2021: The Past, Present, and Future
Bitcoin investors have had a rough ride in the last ten years. The changes in the price of Bitcoin have outpaced even its own usually volatile swings, which resulted in massive price bubbles. It was first noticed in 2011 when Bitcoin’s price increased from $1, in April, to a peak of $32 in June i.e., a gain of 3200% within three short months.
This steep ascent was accompanied by a sharp recession in crypto markets which led to a falling in Bitcoin’s price to $2 in November 2011. In the following year, there was a marginal improvement and the price had risen from $4.80 in May to $13.20 by August 15.
- In 2013, the digital currency started the year trading at $13.40 and underwent two price bubbles in the same year.
- The first price shot was noticed when it went up to $220 at the beginning of April 2013. But this swift increase was followed by rapid deceleration, and the cryptocurrency was valued at $70 in mid-April.
- Later in early October, Bitcoin was trading at $123.20 and by December, it had spiked to $1156.10. However, it didn’t last long and fell to around $760 three days later.
These rapid changes marked the start of a multi-year slump in Bitcoin’s price at the beginning of 2015, it hit a low of $315. During the fifth price bubble in 2017, Bitcoin was hovering around the $1,000 price range at the beginning of that year. Initially, the price was declined but went high to $20,089 on December 17.
Bitcoin’s price moved sideways for the next two years with a resurgence in price and trading volume in June 2019 when the price surpassed $10,000 but it fell to $7,112.73 by December of the same year.
Bitcoin’s Price: Post Covid
In 2020, when the economy shut down due to the pandemic, Bitcoin’s price increase burst into activity once again. It started the year 2019 at $7,200 and by November 23, Bitcoin was trading for $18,353.
The credit for this price increase goes to the pandemic shutdown and subsequent government policies that fed into investors’ fears about the global economy.
- Other factors included continued institutional interest in the cryptocurrency which took Bitcoin’s price very close to $24,000 in December 2020, marking an increase of 224% right from the start of 2020.
- Within less than a month, Bitcoin smashed its previous price record and surpassed $40,000 in January 2020.
- The cryptocurrency was changing hands at $41,528 on Jan 8, 2020, at its new peak. However, it was at $30,525.39 after three days.
Demand for Bitcoin
The interaction between Bitcoin’s supply and demand is an important determinant of its price. This demand can be determined by transaction demand as a medium of exchange. The supply of Bitcoin determines the number of units in circulation and thus its scarcity on the market. Hence, the price of Bitcoin is an outcome of the interaction between supply and demand.
The demand for Bitcoin analytics surges along with its price since Bitcoin is trading at all-time highs as investors pile into the world’s most well-known cryptocurrency. Users can purchase Bitcoin directly using PayPal now, but they won’t be able to use their coins outside of the platform.
Factors that Affect Current Bitcoin Price
Initially, in July 2010, Bitcoin started trading from around $0.0008 to $0.08 per coin. Of course, the initial value of one Bitcoin was $0 in 2009, when it was first introduced. As of February 4, 2021, Bitcoin values at $37890. Factors that affect Bitcoin’s current price are:
- Interest from institutional investors.
- Bitcoin’s use for treasury management at companies.
- For instance, as part of their corporate treasuries, both MicroStrategy Inc. (MSTR) and Square Inc. (SQ), announced commitments to using Bitcoin instead of cash.
- Industry developments that span tech and finance i.e., these developments pertain to both the industries.
- Economic instability. Ever since its inception, Bitcoin has positioned itself as a supranational hedge against local economic instability and government-controlled fiat currency.
Speculations for its future value vary based on who makes the estimate. Jeremy Liew, a partner at Lightspeed Venture Partners, states that Bitcoin could reach $500,000 per coin in 2030 while as per the June 2020 Crypto Research Report, it could go over $397,000 by 2030. What it actually will be, is something that only time will unfold.