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the Bitcoin has reached new all-time highs, first surpassing the psychological threshold of $ 20,000 and now that of $ 23,000. Interest in the world’s # 1 cryptocurrency has returned and many, crypto experts or not, are wondering what to expect now.
After having seen what are the forecasts for 2021 on Bitcoin already expressed by some experts in the sector, let’s see what awaits us now. Will the strong advantage last? It is possible, but the guard must remain high.
Bitcoin hits new all-time highs
Bitcoin has reached new levels since Historical records. Consequently, many investors are rushing to buy bitcoin, just like it happened before bubble burst of 2018.
After surpassing 20,000 on Wednesday, Bitcoin continued its run for the next several hours until it passed the 23,000 mark in the final hours.
The most famous cryptocurrency in the world has tripled its value during 2020. Other virtual currencies also saw their prices rise, thanks mainly to their increased attractiveness due to the weakening of the US dollar.
It’s no wonder that Bitcoin’s ability to hit new all-time highs at the end of this extraordinary year, but looking ahead may be cause for concern.
Many experts are convinced that this is it just the beginning of a career that’s still going to lastBut the problem is that no one can predict when the inevitable solution will come.
At the moment there are many the factors that support the increase From the Bitcoin listing: The Federal Reserve, the US central bank will keep their interest rates close to zero for many months, if not years, and key market figures are showing growing interest in the cryptocurrency. One of BlackRock’s top managers believes that Bitcoin has all the potential to replace gold, and in the meantime, big names in the industry like PayPal and Square continue to wink at the # 1 crypto.
Just in the last week volumes increased by 70% compared to the daily average since the beginning of the year, a factor that indicates how many people are jumping to participate in the Bitcoin rally. But more attention must be paid than ever.
Bitcoin, beware of the difference between price and value
The attention of many market participants today is focused on Bitcoin Price (BTC / USD).
Let’s start right away with an observation: there is no logic that Bitcoin and other cryptocurrencies respond to.
The problem is that most investors don’t focus on difference between price and value. While this is true for investments in general, it is even more true when we talk about Bitcoin.
What is the value of a Bitcoin?
To determine the value of something, we need to be able to define what we are evaluating. For example, a share of a company represents a small part of the company itself. The greater the success and profitability of the company, the greater the possibility that its share price will rise.
What do investors think they are buying when they invest in Bitcoin or other cryptocurrencies? Some argue that Bitcoin is one new form of money, but it’s not like that.
To be used as money, Bitcoin must be able to function as a medium of exchange and a measure of value. But it is a digital currency that has no value in itself. As such, it can never be used as a measure of value. Let’s think about it this way: how many Bitcoins is your house worth? How many Bitcoins will your new machine cost? Once you can answer these questions without calculating, you know that Bitcoin has become a generally accepted form of money.
Bitcoin is pretty a process to transfer money. It is this transfer process and the privacy that it brings that gives value to Bitcoin and other cryptocurrencies. The problem is determine actual value of this process and associate it with a reasonable price.
So you need to understand what the people who buy Bitcoin think. Some decide to buy because the price is rising, not because of its fundamental value.
If analysts and investors had any idea of the true fundamental value of Bitcoin and other cryptocurrencies, the price differential between Bitcoin itself and its competitors would eventually narrow significantly. Prices would also go down.
L ‘Bitcoin price action it is indicative of the desire to own what is going up in price right now and then we just have to hope that the fundamentals justify the bet.
The different forms of money are not real investments. Money is a medium of exchange and a measure of value. Bitcoin cannot be a measure of value until goods and services are priced in Bitcoin.
