Bitcoin has been really going to the moon over the previous several weeks. Recently, it reached an all-time high with the price hitting 41,000 USD, only one month after it broke the 20,000 USD threshold. Since this most recent rally began in early October, the value of BTC rose four times. That is why everyone has the same question on their mind – where is BTC heading next?
That applies to completely new and unfamiliar traders just as much as it applies to professionals from the crypto domain. The question is both complex and resides in a range of factors that few – if any – can comprehend in unified clarity. Instead, the answer is a mosaic of possibilities and chances, along with a healthy dose of completely unknown factors, all of which are both looming over the cryptocurrency market and propelling it forward.
Bitcoin network began working some 12 years ago with the basic purpose of creating a new type of payment system that is both decentralized and independent of any other financial institution. The network was built on an internet-related computing protocol in a way that no group, individual, company, or government counts fully or partially. The history of that network sounds like it has been around for a much longer time than a mere dozen years. But, the truth is that the same network is incredibly novel and without many elements that would help in its assessment.
That includes the ability to independently value an asset, which is the token of the same network, or the BTC. Because of that, no one fully understands how the network should be determined in the sense of its value, either now or in the near future. But, the same did not stop countless investors, both individuals, and institutions, from putting their fiat funds into the same market. Now, assessments of the value of bitcoin are placing it anywhere between 50,000 and 400,000 USD. To make things even more interesting is the fact that these asseements are coming from digital asset specialists and not random people. Instead, these Wall Street seasoned veterans believe that a value of nearly half a million USD is at some point more than possible for this digital curtain token.
Demand and Pressure
Right now, the sheer level of demand and pressure on the sources of bitcoin, like mining pools and those willing to sell their tokens is huge. A lot of that pressure is coming from the idea that these digital tokens are a good alternative for a hedge fund against inflation. The token cap of 21 million is an unchangeable figure in the cryptocurrency network, so the same field is technically immune to any form of classical inflation.
The mainstream economies of the world, however, are nothing like immune. Instead, the Federal Reserve and other central banks of the world are going to decide to print more and more money. In turn, big asset management entities like Turod Investment, for example, decided to put more money into wagers about the movement of crypto prices. These are bitcoin futures contracts that entities like the Chicago CME exchange offer.
Other financial organizations are doing the same, so everyone is now considering that the price of bitcoin, because of that rising demand and pressure on coin producers, will continue to rise. Even JPMorgan Chase analysts believe that bitcoin token price will reach a figure of nearly 150,000 USD in the long term. Those figures are an absolute bombshell compared to the same values predicted by the same entities only a year ago.
Drop of the USD
As the hedging takes place, the US dollar is also on a decline. Foreign exchange markets are seeing the USD index go down steadily against all of the major world currencies, including the euro. One of the reasons for that decline is the fact that the Federal Reserve in 2020 printed over three trillion USD. That is about 75 percent of the entire sum of the printed USD in the past 108 and the history of the FED. At the same time, the situation in the US is politically and socially getting worse and worse. After the prolonged nightmare of the recount and judicial challenges after the 2020 US Presidential elections, a rally of Donald Trump supporters turned violent and the US Capitol was overrun by the angry crowd.
The result of that is the death of five people, one of whom was killed by the police and one who was a police officer. All of that is drastically undermining the US ability to either put its affairs in order or to project any kind of leadership role in the domain of the global economy. That too is in many ways a boon to the price of bitcoin, which is in the world of esports, social media, and other US-centric ventures, usually assessed using the USD fiat currency.
However one looks at it, there is no denying that the history of the financial market is also unmistakable history of all manner of bubbles. Because of that, the financial and market regulators are keeping an eye out for any sign of bitcoin beginning to do something potentially harmful or worrisome for the general public of their respective countries. At some point, the undertakings that want to build their own financial monetary systems are not welcomed by their native country governments. Instead, regulators will sooner or later push them aside, likely using a major bubble burst as the event that kicks off the purging process.
Also, it is important to underline that the current incredible rate of growth of bitcoin value is not sustainable even in the best of times indefinitely. Instead, a correction has to come at some point and it too will drag down the price. Those dips might be temporary, but they could also be major and able to revert the whole bull run back to bear territory. However, the past moments like that show that bitcoin had the ability time and time again to recuperate and return to some period of steady growth. But, with all of that in mind, experts would still be amazed if the price of BTC dropped below 20,000 USD at any moment in the near future.