The cryptocurrency market continued to sharply rise this year and so, and the whole world watching it does not hesitate to ask the question: will this movement be permanent or will the bubble burst very soon?
Experts are more inclined towards the first option. They say that the positive dynamics in 2020 will continue this year. There is no doubt the virtual currencies are now becoming even more popular and this can lead to the start of a massive crypto revolution. Analysts believe that the digital economy will be involved in many industries in the near future, which will expectedly result to a wider adoption of cryptocurrencies.
It can be recalled that bitcoin's price has steadily risen in the second half of December 2020. On December 16, the leading digital currency broke through the all-time high of $ 20,042 that was kept since 2017. This was followed by BTC's systematic and sharp continuous breaking of records. During the start of January 2021, it set an absolute price record and showed a new all-time high of $ 41,950, but it later began to make a correction.
Last week, JPMorgan released a study that gave an impressive nominal value to Bitcoin. This is based on the fact that the main virtual currency will replace gold as the most preferred means of payment for investors of the digital age.
Experts noted that investors are still currently into precious metals, such as gold, silver and the like. At the same time, they said that the transfer of gold products to bitcoin will theoretically lead to an increase in its value to $148,000.
On the other hand, more cautious supporters of the digital coin do not claim that it becomes a means of payment today. They are rather inclined to believe that such a status awaits BTC at the end of a long journey, when multiple issues with strange price fluctuations without any transparency, will become forgotten.
Many experts believe that the Bitcoin rally in 2020 and 2021 looks quite stable, as capital inflows mostly come from long-term institutional investors and not from loss-of-profit retail investors.
At this point, skeptics may argue that bitcoin still does not fulfill the main functions of money– a means of exchange and a unit of account. In addition, no tax authority will accept Bitcoin payments today.
The defenders of the main digital coin argue that all of these arguments apply to gold as well. However, this is where the comparison ends. After all, the main precious metal has a historical connection with jewelry, which is necessary to satisfy human vanity and cannot be achieved with the help of virtual coins.
Fortunately, such lengthy considerations do not affect the rally initiated by the liberal policies of central banks and negative yields of historically reliable assets – bonds. According to some data, more than $18 trillion gives a negative return this day.
The value of gold and bitcoin could be vulnerable if central banks reorganize their economies and restore positive returns to safe assets in the world. However, only the most bold investor can trade against cryptocurrencies in the short term.