After breaching the $30,000 mark on January 2, 2021, bitcoin continues to advance at a blazing speed. As of January 8, 2021, the price had risen by another 29.7% to $41,670.91. The world’s most popular digital currency is displaying its finest moments at the start of this year.
Likewise, because of bitcoin’s spectacular ascent, the cryptocurrency market’s total value now stands at over $1 trillion, a historic feat indeed. Cryptocurrency investors are thrilled that the digital asset has doubled in value since mid-December 2020. Could bitcoin’s price hit $100,000 in 2021?
Bitcoin’s growth drivers
Firms focused on the crypto space believe bitcoin’s further growth is inevitable. The price will not move in a straight line, according to some crypto traders. Bitcoin could hurdle the $100,000 level then increase by increments of $50,000 in the years ahead. A team at JPMorgan Chase thinks the value could be $146,000 in the not-so-distant future.
Analysts from the American investment bank said competition with gold as an ‘alternative’ currency has started and will continue over the coming years. Bitcoin is attracting gold buyers that it could become gold-like security soon. The researcher team also predicts millennials will form an important component in the crypto universe.
Younger investors will prefer digital gold over traditional gold. Another factor for the blockchain-backed cryptocurrency’s resurgence is the increasing number of institutional investors. A report said PayPal bought bitcoin in November 2020. Broad adoption of digital currencies by established corporate names would increase investors’ confidence significantly.
Panxora Group CEO Gavin Smith warned that bitcoin is far from being a magic money tree. Investors can expect sharp dips as much as 25% when people withdraw profits periodically. Other cryptocurrencies, such as Ethereum and Litecoin, are posting rising in value. Last year, both digital coins posted triple-digit percentage point gains.
Growth-oriented crypto miner
On the Toronto Stock Exchange (TSX), HIVE Blockchain Technologies (TSXV:HIVE) keeps pace with bitcoin’s bull run. The blockchain stock is up 2,927.3% from a year ago. As of January 8, 2021, you can purchase the stock at $3.33 per share. The $1.12 billion company engages in the mining and sale of bitcoin, Ethereum, Ethereum Classic, and bitcoin.
This growth-oriented company aims to build a bridge from the blockchain sector to traditional capital markets. Its cryptocurrency mining facilities are in Canada, Iceland, and Sweden. The latest buzz is that the company is doubling its bitcoin production capacity. It recently acquired a new generation of bitcoin miners.
HIVE is the leading Ethereum producer, a better-performing digital coin than bitcoin. In the fourth quarter of 2020, the inventory was 13,000 coins compared to approximately 140 bitcoins. Still, HIVE’s bitcoin production increased by 57% versus the preceding quarter. The near-term goal is to utilize cash flow to invest in next-generation mining equipment to provide positive gross mining margins.
Monumental collapse
Historically, the cryptocurrency market is generally volatile. Thus, bitcoin’s value is quite volatile too. The pattern today is similar. In late 2017, the speculative bubble burst after the price rose to nearly $20,000. From January to February 2018, the price fell 65%. Furthermore, security breaches add to bitcoin’s volatility.
It would be risky to take a position in bitcoin today. The monumental collapse before resulted in high-profile losses. If it happens again, it could have a double effect on volatility. Bitcoin is rising, and so are the risks.
