It’s just been a few days and already 2021 is off to a great start for bitcoin and the land of cryptocurrency. The world’s number one digital asset by market cap has shot beyond the $30,000 mark. In fact, it is currently trading in the high $32,000 range, which is a small dip from its new all-time high of roughly $33,000.
Bitcoin Is Enjoying the New Year
2020 really set a pinnacle for bitcoin and crypto trading. The asset rose all the way to about $28,700 during the final days of December. Now that January is here and bitcoin is all set for a new 12-month period, it looks like things are continuing the bullish patterns traders everywhere have become so used to in recent weeks.
In addition, analysts everywhere believe that things are going to remain like this for some time. Nicholas Pelecanos – head of trading at the cryptocurrency firm NEM – explained in a recent interview that he thinks bitcoin could reach a price of roughly $50,000 per unit by the time we’re in mid-February.
When any asset climbs in price this fast for an extended period, I become cautious, and I’d urge anyone trading BTC to not get caught up in the euphoria. I believe we are just at the beginning of what will be an immense bull market.
For many industry experts, the rises will continue so long as the government continues to look to increased spending measures to ensure citizens get the funds that they need to survive the ongoing pandemic. Russ Mould – investment director at brokerage AJ Bell – recently mentioned:
Gold reached a new all-time high in 2020 and bitcoin has set a string of new peaks, more than trebling in the second half of the year to pass the $28,000 mark for the first time. Some will argue that there is more to come from both gold and bitcoin, especially if governments keep piling up debts and central banks do their best to fund that borrowing through the backdoor with quantitative easing, zero interest rates and bond yield manipulation thanks to their scarcity value relative to cash.
Not Everyone Will Be Convinced
However, he was also quick to say that bitcoin is always likely to have doubters, despite the recent surges it’s been enjoying. He explains:
Others will argue that neither gold, nor bitcoin have intrinsic value, as they do not generate cash. Some will even argue that bitcoin is just a glorified Ponzi scheme, as new money flows in at the bottom to help the smart money that got in early bail out at the top. In 2021, investors will get their chance to pay their money and take their choice as to whether they will see bitcoin and gold as stores of value and useful portfolio diversifiers, as governments and central banks conjure money out of thin air.