The fact that bitcoin price has exploded, just like its market cap, has been headlining financial news for some time. In the last month or so, BTC token managed to add almost 50 percent to its baseline price for the previous period. This resulted in some massive jubilation in the cryptocurrency community.
There, many have been waiting for a moment like this for nearly four years. The last time bitcoin positioned itself like this was back in 2016, when the foundations for the first huge bull run were set in place. Now, the same foundation seems to be slowly aligning themselves once again. Naturally, the fact that all of this is taking place in 2020 is no detractor to the idea of a new big crypto price increase.
In many ways, the present economic environment, as well as huge levels of political and even social instability, are opening the way for crypto in an unprecedented manner. For many investors, the moment for that to bloom in a fully-operational bull run is in the coming weeks and months. There are numerous sides to that possibility that detract from the theory of an impending skyrocketing of the price, but the consensus is slowly forming around the idea that bitcoin is going to the Moon very soon.
Calling 2020 a hectic year would be a gross understatement. The same applies to the domain of cryptocurrencies and bitcoin in particular. Its price covered an incredible array during the past months. In March, the general market collapse that coincided with the start of the covid-19 coronavirus pandemic also brought down bitcoin to its knees. This was also the period that saw the total destruction of the theory that cryptocurrency is the hedge fund of choice for any traditional market turbulence.
Instead of gaining value, like many supposed cryptocurrencies would do if the traditional markets suddenly came into a rapid decline, bitcoin simply joined the fall. During that period the price of a BTC token went to around 4,000 USD. Now, this digital currency is within touching distance of the price of 16,000 USD. This incredible feat would be and thinkable for practically any kind of financial or tradable asset. However, in many ways, the global pandemic is what provided the right environment for this type of resurgence. The same factor is now also an element of the expectations of a new bull run.
Rocky Road Ahead
There is no denying that the enthusiasm around the recent spike in bitcoin and overall cryptocurrency value is something that is effectively capturing the imagination of the wider public. But it would also be foolhardy to declare that bitcoin is presently on the launch ramp for new records. Even in terms of popular attention, bitcoin is still far away from the almost mania-level of interest that it saw in late 2017. Back then, there was no insane projection of bitcoin value that would come in 2018 that did not get at least some traction in the public arena.
This was what allowed people like John McAfee to say that bitcoin price would easily reach 80,000 USD by the end of 2018. Yet that year saw the start of what would be later known as the crypt winter, slashing everyone’s projections about the future price movement of the BTC token. Today these lessons cannot be forgotten. Based on all relevant price indicators, bitcoin still has a long way to go before it comes near the 20,000 level of the previous record. Some investors might be willing to overlook that fact, but that does not make it any less true.
The number of digital wallets that are in use around the world today is larger than it ever was before. So so is the rate of bitcoin and other cryptocurrency adoption, it has been steadily rising over the past several months, even one year. What was previously the domain of tech-oriented individuals like esports players or cryptocurrency evangelists is now gradually becoming something of everyday life for many ordinary citizens across the world. But at the same time, individuals are becoming apparently more and more weary of any notion of a bitcoin price explosion.
Things like Google Trends show are relatively steady and flat Google search interest in bitcoin. Instead of this phenomenon also being in the state of expansion right now, the search interest seems to be very similar or even lower to that of June 2019. Back then, the price of bitcoin was around 10,000 USD. The small rally that was forming in that period did not boost the price anywhere near its record levels before it lost steam. This is also a reflection of the continued maturity of the bitcoin and cryptocurrency environments. Today, when the stage is set for that famous fear of missing out or FOMO, much of the public is apparently resisting the same hype. That might weaken the possibility of a strong bull run, but it also strengthens its longer-lasting potential.
Besides the facts surrounding bitcoin interest in the general public, there is one source of interest that is unquestionably different than anything crypto had in 2017. That is the attention and interest bitcoin and crypto are getting from the institutional players. Recently, PayPal confirmed that it is going to roll out at a dedicated set of cryptocurrency services, including features of buying, selling, and holding. This immediately both increased its value on the market and added some tailwinds to the cryptocurrency token, and not just those that PayPal is going to list on its platform.
Also, companies like Square decided to invest tens or even hundreds of millions of USD into cryptocurrency funds as a way of expanding and diversifying their portfolios. All of this is a big and qualitative change to the wider crypto environment than that of the previous bull run. Also, all of this will play a role in the future bull run, whenever it might materialize. The more optimistic voices in the crypto community see that moment happening before the end of the year. Others are more cautiously pointing to 2021 as the time frame for this to take place. But, almost all agree that this massive price increase is coming no matter what.