The market leading cryptocurrency Bitcoin has always been capable of capturing the headlines, with its historic 2017 price offering a relevant case in point.
During this helter-skelter 12-month period, the value of Bitcoin soared from just $900 to a staggering $20,000, with the latter representing a peak that seems insurmountable for the time being.
However, the long-term portents for Bitcoin remain strong, while a recent explosion in value has also captured the attention of investors. But is this indicative of what we can expect in 2021 and beyond?
A Look at Bitcoin’s Latest Price Explosion
Bitcoin’s price has largely risen throughout 2020 and the coronavirus pandemic, breaking the $12,000 barrier in the process.
Despite a subsequent lull in September (which has historically proven to be a difficult period for the cryptocurrency), Bitcoin has been growing at an exponential rate since October and even smashed through the $14,000 and $15,000 barriers towards the end of the month.
According to Craig Erlam from Oanda, the precise reason for this latest price explosion is unclear, despite assertions that it has been triggered by the US election. Typically, Bitcoin hasn’t aligned with risk assets for much of October, so this recent price run may actually be indicative of a more sustainable growth trend.
Regardless, the price hike most likely has some connection to the decline of fiat currencies amid ongoing quantitative easing measures, with Bitcoin becoming increasingly attractive thanks to its finite nature and the fact that it’s largely immune to macroeconomic factors.
Irrespective of the precise triggers, Bitcoin is now trading at its highest levels in nearly three years and this trend looks unlikely to change dramatically anytime soon.
What Will Happen in 2021?
Many economists and crypto experts predicted an explosive price movement for Bitcoin towards the end of 2020, and this seems to have finally taken hold during Q4.
Some estimated that the cryptocurrency would reach a high of between $16,000 and $20,000 during this price run, with the former now appearing the most likely as we approach the end of the year.
If a similar growth rate was to be sustained throughout 2021 (which could well be the case if coronavirus continues to impact on the global economy during the first half of next year), it’s thought that Bitcoin’s value could ultimately supersede its previous $20,000 high recorded back in 2017.
It could even break the $70,000 barrier by the end 2022, before superseding $100,000 at some point between 2023 and 2025.
What’s interesting to note is that Bitcoin has been heavily correlated with the S&P 500 throughout 2020, with this index having also jumped on the back of the US election.
Not only this, but similarly evolving cryptocurrencies such as Ethereum and Ripple are also poised for sustained price hikes over the course of the next 18 months or more, creating a solid foundation that can help to inform investors and their decision making over time.