Bitcoin Prices: Why Have Prices Remained High Despite Crash
In 2019, the price of Bitcoin more than doubled compared to how it ended in 2018. And that is not all, as the prices are expected to soar even further in 2020 as more and more investors regain trust in the coin. Couple this with other factors like the upcoming Bitcoin halving that’s set for May in 2020, and you will see why a lot of people expect this crypto to do even better going forward.
So, what has changed since the infamous Bitcoin crash of 2017 and are there any underlying factors behind Bitcoin’s sustained high price?
In this post, we take a more in-depth look at this popular crypto and the reasons we believe its price is never going to $0 any time soon. Also, remember to check out Crypto Head Canada to learn more about cryptos and related investments options.
Bitcoin becoming easier to use
A few years ago, as late as five years ago, only a very tiny segment of the world’s population had heard about Bitcoin, let alone use it. But that is changing quickly, and now quite a good number of people have an idea of what cryptos are and even transacted with some of them. What’s more, it’s getting easier with every passing day to use Bitcoins even as more companies embrace the tech and businesses accept it as a mode of payment. The launch of facilities such as Bitcoin ATMs and cryptocurrency cards has also made it convenient for users to take up digital cash technology.
With this increasing acceptance of Bitcoin, there’s no reason really for its price to plummet. Sure, like any other investment option or currency, there will be occasional ups and downs for Bitcoin but don’t expect it to lose incredible amounts of value any time soon.
Bitcoin as the modern-day store of value
The prices of cryptos, unlike bonds and stocks, are hardly affected by the actions of governments and central banks. Instead, they are governed by fixed policies that are entirely independent of sovereign authorities. For example, there exist only 21 million Bitcoins in the world at any time, which means this cryptocurrency is least prone to factors like inflation. Indeed, this is why many proponents of Bitcoin and other forms of cryptocurrencies compare them to Gold which has traditionally been considered a reliable store of value.
Bitcoin halving is fast approaching
Bitcoin halving is not a new event given that it’s already been conducted a couple of times in the history of Bitcoin. The third halving is set for May 2020, and like the past two cases, the prices are expected to go up significantly once the process is complete. For example, in 2012 when the first halving took place, prices shot to $1000 which was a new high at the time. Four years later, the event saw Bitcoin shoot to over $19,000, which remains to be the highest price Bitcoin has reached in its short history.
Halving seeks to cut by half the rewards given to miners for the work they do in adding new coins to the blockchain. With bulls expecting this process to impact the prices of Bitcoin positively like it’s been the case historically, most of them will be looking to buy low now in anticipation to sell high in 2020.
Increasing acceptance of Bitcoins
If you think that only the regular people appreciate the investment opportunities that Bitcoin presents, then you are probably wrong. Today, big institutions and regulatory bodies are also joining the bandwagon with some even adding cryptos to their portfolios.
In recent months, big companies like TD Ameritrade, Fidelity, and E-Trade Financial Corp. have shown a lot of interest and intention to accommodate cryptos in their growth plans. For example, E-Trade is said to be preparing to allow customers to trade using Bitcoin and Ethereum on its platform. On the other hand, Fidelity recently launched custody and investment service for clients willing to buy and invest in cryptos. Finally, one of the world’s biggest stock brokerage companies, TD Ameritrade, has also announced its intention to join the crypto hype.
Regulatory bodies and governments have also not been left behind with states like Wyoming setting the pace for others with the enactment of laws and policies that seek to make investing in cryptos a lot easier for citizens.
The future of Bitcoin looks brighter than ever before, and that means more stable prices and a more mature market to look forward to in 2020 and beyond. The rising interest in the mainstream financial sector, as well as the upcoming Bitcoin halving and the resulting supply cut, are some of the critical factors responsible for these changing fortunes.
Do you think Bitcoin will break its price record in 2020? We’d love to hear your feedback.
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