Bitcoin «unleashed»

Bitcoin has gone up fast and strong – it looks like the “crypto winter” is not coming. Let’s try to figure out what is going on and what to expect.

Bitcoin last hit the $ 50K mark exactly three months ago, on May 15th. And now it is getting back up there again. The first cryptocurrency has risen in price by 64% in just a month – a spectacular recovery after falling to $ 29600.

On Saturday night, August 14, the Bitcoin price approached $ 48,000 for the first time since mid-May. Even though it was followed by a minor pullback to $ 46800, it was hardly strategic. In any case, since July 20, BTC quotes have risen by 64%. Interestingly, many stock traders still bet on the continuation of the bearish trend. On August 13-14 alone, the positions of 52 thousand traders worth over $ 294 million were liquidated on the exchanges. 83% of transactions forcibly closed by crypto exchanges were short – that is, users opened them, hoping for a further decline in the crypto exchange rate.

At the moment, despite the slight pullback, many experts still predict the price to approach $ 50,000 in a matter of days. Whether a new sale will follow this threshold is still an open question. On the other hand, there aren’t any significant, “ground-swelling” Bitcoin-related events on the horizon, and trading volumes remain relatively low. Which means that, most likely, the value can be expected to either stabilize or continue its steady growth. Moreover, if the current momentum continues, many retail investors will want to join in rather soon.

So what has boosted the BTC market (and, by and large, the entire cryptocurrency market)? First, the US Senate rejected controversial amendments to the infrastructure financing law having to do with the regulation and taxation of cryptocurrencies. Secondly, changes in Ethereum caused its value to rise: for the last few days, it has been trading at above $ 3000 per coin. And since the leading cryptocurrencies in the eyes of investors are interconnected, their prices rise and fall more or less simultaneously.

Some analysts believe that we are now seeing the third of the five waves of Bitcoin price shifts. On the crest of this wave, the asset price may exceed $ 50 thousand, after which, according to the forecast, there will be a $ 4-6 thousand correction, then the fifth wave will bring it upwards to $ 55-56 thousand.

At the same time, there are significant reasons to expect further BTC value growth for a fairly long time going forward (perhaps even until the end of the year). Here’s a purely technical signifier: in recent months, investors have withdrawn from 75 to 100 thousand BTC from centralized exchanges every month, according to Glassnode. Previously, such volumes were withdrawn from exchanges before the substantial leap in the price of the first cryptocurrency. Just last month, the outflow of bitcoins from centralized exchanges exceeded 100,000 BTC. There have been only three such occurrences recorded since September 2019. According to analysts, only 13.2% of the bitcoins in circulation remain on the exchanges. It is the lowest figure in 2021.

But there is also a much more significant factor: perhaps for the first time in the history of Bitcoin, it is in demand not only among small “hamster” investors but also among institutional investors and ordinary Internet users. As for the latter, we recently wrote that Twitter founder Jack Dorsey has plans to integrate a Bitcoin wallet with Lightning Network support into every Twitter account. His own company, Square, is currently developing the wallets. “Every Twitter account must be linked with a Lightning node,” Dorsey tweeted.

In terms of institutional investors, cryptocurrency news analysis shows that 55 out of 100 largest banks have invested in companies related to crypto and blockchain this year. The most active investors were Barclays, Citigroup, Goldman Sachs, J.P. Morgan Chase, and BNP Paribas.

And we haven’t even mentioned many other funds and various corporations.

Now the question is: what will happen next? Specialists interviewed by Bloomberg predict that BTC will rise to $ 50,000 and beyond in the nearest future. As there are no apparent reasons for it to drop at this time, the market is likely to continue growing. The only two questions are how far investors will go and whether Bitcoin could reach $ 100,000.

Another expert poll has caught the author of these lines’ eye – this one gave even sunnier forecasts. I reiterate: it polled serious market participants, not some couch investors. And the majority of respondents (61%) agreed that Bitcoin is now undervalued: by the end of 2021, the value of the first cryptocurrency, in their opinion, will reach $ 66,284. This is 28% higher than the same group of experts predicted in 2020 for the same period, the end of 2021.

A stable increase in BTC cost is expected to occur in the time frame from 2022 to 2025, with it reaching $ 318,000 at the end of 2025. Further growth will be explosive: skyrocketing to $ 4.28 million by 2030. However, 44% of survey participants believe that this will never happen.

Meanwhile, against the backdrop of the growth of Bitcoin, other cryptocurrencies have already increased in value. We will talk about the upcoming “season of altcoins” in one of the following articles.