16th Nov 2020

Bitcoin’s Inexorable March to $20,000?

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Bitcoin, the largest and most popular cryptocurrency, has had a highly volatile trading history. When it was created in 2009, it was traded for almost next to nothing. In fact, in its first real world transaction in 2010, 2 pizzas from a Papa John’s were bought with 10,000 BTC. 

It was only in 2013 that Bitcoin started to take off. The blockchain-based currency rose from $13.50 to over a $1,000 by the end of the year. Bitcoin kept rising and falling around these levels for the next few years. Then in 2017, Bitcoin experienced a meteoric rise. In early 2017, the price broke through $1,000 and by December 17, the price had reached $19,783.  

The price, however, went into a downward spiral in 2018, failing to reach anywhere near the 2017 levels. But all that changed in 2020. Bitcoin has been extremely strong in 2020, rising to $19,850.11 on November 30, to set a new record high. 

Can Bitcoin Breach the $20K Barrier?

The pandemic hit year has been quite good for Bitcoin. At the start of the year, the crypto was being traded for less than $10,000. But ever since the effects of Covid-19 took effect in March 2020, BTC has been on an ascent. This upward march is not expected to end any time soon. In fact, chances are high that Bitcoin might breach the $20,000 barrier before the end of the year. Here are some of the reasons behind this. 

PayPal Effect

In October 2020, PayPal entered the cryptocurrency market. It announced that its customers would be able to sell as well as buy Bitcoin and other cryptocurrencies with the help of their PayPal accounts. Bitcoins could then be used to make purchases from over 26 million sellers that accept PayPal. 

PayPal is also planning to increase the understanding and adoption of cryptocurrencies among its customers. PayPal would also convert cryptocurrencies into the relevant national currency. This way, the company being paid would receive just the right amount of fiat currency, rather than virtual coins. These developments have come as a huge boost to Bitcoin. 

Sustaining OKEx Outflow

In late November, another major source of concern for Bitcoin was resolved. This was the outflow of BTC from one of the largest cryptocurrency exchanges in the world. There were speculations among many analysts and traders that the end of a five-week-long withdrawal suspension could lead to liquidation. 

This could then translate to high selling pressure. Data from the underlying blockchain network revealed that around 24,631 Bitcoins flowed out in just 24 hours of the suspension being lifted.  
But this development, along with other negative news, such as rumours of cryptocurrency regulations by the US Treasury, were shrugged off by BTC. Even certain data indicating whales dumping their Bitcoin holdings did not affect traders. 

Positive Analyst Attitude

In recent weeks, Wall Street analysts have also made positive comments about Bitcoin. For instance, Alliance Bernstein, who is a $631 billion money manager, recently published a report. The report stated that the post-pandemic economic environment could create a place for Bitcoin in the asset allocation of investors. Such positive attitude from analysts has also helped push the value of the virtual coin higher. 

Bitcoin is already close to the $20k mark. Plus, most of the conditions surrounding it point towards a continued upward trend. But cryptos can be highly volatile. So, before taking any position, make sure to conduct thorough research and use risk management tools wisely. 
Do you think bitcoin will hit $20,000 this year? Comment below and give us your prediction for this and other digital currencies. 
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