Bitcoin has risen more than 50 percent since the beginning of October, a price increase of more than 500 percent since last October, and a 5,000 percent increase over the past four years.
After hitting an all-time high above $66,000 this week, crypto market analysts have questioned whether such remarkable momentum can be sustained.
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A popular price forecasting model Keeps bitcoin on track to reach six digits before the end of 2021, although its notorious volatility threatens a major correction at some stage.
But the prospect of a potential price crash, as seen after an all-time high in mid-April, is refuted by those who believe that bitcoin’s intrinsic value lies in its inherent scarcity that could limit its supply to 21 million units. limits.
Adherents of this theory refer to bitcoin as “digital gold”, believing that it may eventually overtake a market capitalization of $11 trillion – each coin giving $500,000. value of more than.
The launch of the first ever bitcoin futures exchange-traded fund (ETF) on the New York Stock Exchange this week also fueled comparisons between the cryptocurrency and the precious metal. The move was a major milestone for the crypto industry, helping bitcoin hit a record high by opening it up to a previously untapped legion of institutional investors.
A similar price increase was seen after the NYSE’s first gold ETF was listed in 2004, when its market cap was roughly equal to that of bitcoin today.
“$100,000 is a very realistic target for bitcoin in the relative short term, but it has the potential to go much, much higher,” said Nick Spanos, co-founder of decentralized applications platform Zap Protocol. Granthshala.
“So investors who are buying now can potentially see a 10x increase in their investments. I understand the appeal of altcoins [like the uncapped Ethereum], as they potentially offer high returns and may seem fairly undervalued, but I think bitcoin should form a large part of any crypto portfolio as it is the future of money and has huge untapped potential.
This idea of bitcoin as the “future of money” has been crushed in recent years, with critics claiming it lacks the scalability to function as a mainstream form of payment. Until recently, transactions on the bitcoin network were expensive and time-consuming, although the introduction of the Lightning Network on a large scale could theoretically solve these issues.
One of the places where this second layer technology is being tested is El Salvador, where bitcoin became legal tender alongside the US dollar in September. This is the first time in the world that a country has adopted a cryptocurrency as an official form of payment, and the success of its roll-out could inspire other countries to follow suit.
Politicians in several other Latin American countries are already taking steps to introduce friendly bitcoin legislation, including Argentina, Panama and Paraguay. Advocates say it offers a way to bypass expensive remittance fees, reduce reliance on the US dollar as a reserve currency, and increase financial inclusion for those forgotten by the formal economy.
El Salvador’s bitcoin announcement earlier this year was one of the triggers of the cryptocurrency’s massive price rally, and more gains can be expected if other countries follow. With a market cap of over $1.2 trillion, bitcoin is already the 13th largest currency in the world, surpassing the Swiss franc during its latest surge.
The overall cryptocurrency market also hit an all-time high this week, reaching above $2.5 trillion for the first time in its history.
This puts it above Apple, the most valuable company on the planet, while bitcoin alone is now worth more than Facebook and Tesla.
John Caroni, CEO of crypto token Safemoon, believes that while these latest records draw attention to bitcoin, renewed interest from retail investors will spur institutional investment, which may prove to be a catalyst for a parabolic price increase. could.
“Bitcoin’s latest all-time high will set a new precedent for the cryptocurrency industry, as headline-grabbing price has the potential to eventually bring crypto into the mainstream,” he explains. Granthshala.
“Everyone is now able to access cryptocurrency in just a few clicks from their phone. It is no longer something that is just talked about online – now everyone can have it easily, just like people Do your weekly shopping online.”
Credit: www.independent.co.uk /