Bitcoin has had a turbulent but comparatively strong year within the overall crypto market – with COVID-19 significantly impacting crypto markets and financial markets in general, Bitcoin has confidently retained its position as the largest cryptocurrency by market cap.
Moving forward, there are a number of factors that will impact the performance of BTC and determine the position it holds within the market.
An Overview of Bitcoin
Bitcoin is a cryptocurrency, launched in 2009, that utilises a decentralised ledger system called blockchain technology. Since its beginnings, Bitcoin has grown significantly and inspired the creation of thousands of projects within the blockchain and crypto space.
As a cryptocurrency, Bitcoin has real world applications and aims to offer lower transaction fees than other online payment systems. When it comes to trading Bitcoin, online trading platforms such as Zipmex allow for features like competitive pricing, efficiency and security in trading Bitcoin, making it extremely accessible.
In 2020, the value of Bitcoin has been extremely volatile – it more than halved in the early months of the year, and has since recovered, regaining its position at over $10,000 USD.
What is Going to Influence the Performance of Bitcoin Going Forward?
Overall, the future of Bitcoin is looking optimistic. Many experts are confident in the cryptocurrency maintaining relevance, whilst some believe it will become a significant part of the global economy or even a mainstream currency.
The recent impacts of COVID-19 have indicated to many the relevance of digital assets such as Bitcoin – however, despite Bitcoin’s broad ranging possibilities for implementation, the place that the cryptocurrency will hold in the future remains unclear.
Looking past general speculation, there are a number of factors that will influence the future performance of Bitcoin. Namely, there are various micro factors that suggest a bearish market in the short term, but more optimistic performance in the mid-long term.
- The recently declining performance of the USD may benefit Bitcoin, in a similar way to gold. If the USD does continue to drop (a possibility due to low interest rates and the euro recovery fund), and if people continue to consider Bitcoin as a viable hedge against inflation, there may be some impact on BTC.
- Regarding the similarity of gold and BTC, higher similarities in recent times may indicate higher confidence in Bitcoin by investors within the context of poor USD performance and other market conditions.
- Increasing trends of investors holding BTC in the longer term, as well as an increase of large investments in BTC that appear to be for the long term, are possible indicators of long term investor confidence in the cryptocurrency.
When considering the opinions of industry experts, some predict that the value of Bitcoin will rise towards 30,000 in the near future, and many are confident it will hit 100,000 in the long term. With mainstream adoption of BTC and consistent buying of the cryptocurrency on a regular basis, it is likely that investors will continue to include Bitcoin within mainstream portfolios, meaning that these predictions are entirely possible.
Factors such as inflation are another point of consideration in predicting the long term future of Bitcoin. The cap on the number of bitcoins available to be mined is another indication of possible long term success – while inflation has impacted traditional currencies significantly, Bitcoin will not be affected to the same extent.
Regardless of speculation and possible future impacts, Bitcoin is gaining relevance within the mainstream consciousness in 2020.
How Long Will Bitcoin Last?
With the final Bitcoin predicted to be mined around the year 2140, there is a long future ahead of the cryptocurrency. Whether it maintains relevance is another story, however with the broad possibilities for application and the problems that are connected to traditional currencies (such as the aforementioned issue of inflation), there is a good chance that Bitcoin will see success in the long term.