As of late, bitcoin appears to be traveling on a rocket ship to the moon. The currency recently struck the $19,000 price for the first time in roughly three years, and many analysts think that the asset is likely to continue its bull run into 2021.
Bitcoin Is Spiking Because People Are Buying It
Several industry experts are pondering what could potentially make bitcoin travel so high in such a short period. Is it the fact that fiat currencies such as USD are suffering from economic inflation? Is it the news that coronavirus cases are surging throughout the world? These could all be contributors, but according to Catherine Coley – the CEO of Binance.US – the reason is the high number of first-time buyers that keep entering the space as of late.
This appears to be a classic case of FOMO or fear of missing out, and with respect to bitcoin, this certainly isn’t the first time this has happened. As soon as the currency experiences a few shock spikes, everyone feels inclined to get involved. They see the price shooting up, figure they need to get in there fast so they can take advantage of financial gains, and they begin trading quickly.
Well, unfortunately, this also has a negative side to it. While its good in that it causes bitcoin to spike in the short term, it can also have lasting effects that may lead to a lengthy demise. As we all remember, this is what occurred not long after bitcoin struck its all-time high of nearly $20,000 in December three years ago. Everyone saw the asset’s price rising and they suddenly felt the need to get involved.
It wasn’t long before the entire bitcoin system crashed, and by the end of 2018, the currency was trading for well below any figure it had encountered in the year before. In fact, it lost roughly 70 percent of its value and was going for less than $3,500 at one point.
But while Coley predicts a bitcoin pullback could occur in the coming weeks or months, she’s confident that it won’t last nearly so long as it did in 2018. In a recent interview, she comments:
I would say, if anything, a small pullback is going to be bought quickly as we see the story and the narrative around a digital asset, like bitcoin, remaining really true and necessary, in the times ahead.
A Big Future Ahead
As it stands, she believes that there are more buyers than sellers of bitcoin during the present time, which is causing these spikes to occur. She mentions:
Well, the easy answer is more buyers than sellers, but the better way to look at this is really what’s taking place here. You’re still seeing the demand for bitcoin come in, while those that have been holding bitcoin remain HODLers, as we call it in the industry.