December 2021 saw the virtual currency Bitcoin posting its highest trading value so far. This was announced on December 1 when Bitcoin was traded at $19,920.53. Such an achievement was spectacular considering the financial chaos caused by the COVID-19 pandemic. As such, there have been many within the crypto trading realm who have suggested that Bitcoin could be on course to hit a trading value of $100,000 by the end of 2021.
The cryptocurrency has already seen price rises of up to 30-times its original value, and so a five-fold increase in the trading value of Bitcoin is something that many predict will happen. But given Bitcoin’s volatile trading record, there are plenty who suggest that it could be many years before the crypto hits the $100k mark. This has been coupled up with comments by leading financial figures such as Bank of England Governor Andrew Bailey saying that the crypto had little intrinsic value and warned that people can ‘lose all their money’ if they invested in Bitcoin.
Nowhere was this more visible that when Bitcoin last set its highest trading value record in December 2017. This saw the value of Bitcoin breaking all previously existing records for the cryptocurrency. But from here, the value of Bitcoin slumped by over 80 per cent within a year. This led to the trading price of Bitcoin being just $3,200.
Such extreme volatility has meant that the cryptocurrency has repeatedly been viewed with suspicion in the traditional financial markets. After all, businesses trading in Bitcoin would have faced collapse following such a devastating drop in value.
However the rapid rises in the value of Bitcoin has meant that it remains one of the most popular ways for people to get into investing. There has been a dramatic growth in crypto resources like www.bitreviews.com that aim to help people find a safe and fair cryptocurrency trading platform. This has meant that more people than ever before are helping to fuel the dramatic recent rises in the trading value for Bitcoin.
In 2020 alone, the price of Bitcoin has risen by 170 per cent. This is a result of a number of factors which include the fact that PayPal made the decision to allow its users to buy and sell the cryptocurrency. In addition to this, many key financial institutions have started to view cryptocurrencies more favourably. This is because it is thought that investors now view the likes of Bitcoin as being a safe option amid the economic uncertainty caused by the current pandemic.
Nowhere was this better seen than when key Wall Street operators like Guggenheim Partners decided to spend $530 million into investment trusts that are largely exposed to Bitcoin. Such moves suggest that the dips in value suffered by Bitcoin aren’t enough to stop this cryptocurrency enjoying a steady rise in value over the next 12 months.
It’s not just Bitcoin that has enjoyed a momentous year. Similar cryptocurrencies like Ripple, LiteCoin and Ethereum have also experienced rapid growth amid the social and economic turmoil of 2020. All of which suggests that cryptocurrencies are now a regular part of many investor’s portfolios.
By balancing volatile cryptocurrencies like Bitcoin against more measured commodities such as gold and other precious metals, it has led to the belief that cryptos are part of a well-diversified investment portfolio. Much of Bitcoin’s future depends on how government and banking institutions regulate the cryptocurrency.
Previously there has been a fierce scepticism about Bitcoin being anything other than a speculative asset. Such views were widely held among the Trump administration, but there are hopes that the new US presidency could be more accommodating of such new financial models. One thing is for sure, and that’s that Bitcoin will be creating plenty more headlines in 2021.
Disclaimer: The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice.