It seems the entire world is talking about bitcoin right now. Bitcoin’s value and how high that value can rise is most definitely a hot topic of conversation.
There is a big test for bitcoin’s price coming up and it could happen any day now because it is threatening to break through the $20,000 barrier for the first time in its history. Bitcoin hit an all-time high of $19,857.03 on November 30 and is currently trading, at time of writing, at $19,806.91, according to CoinDesk.
Predicting bitcoin’s price movement is a difficult task. Doing so isn’t as clear cut as predicting the outcome of a football game while watching on tv because there are far more variables. All anyone can do is take all the available information and make an educated guess into the direction the market is heading.
“Bitcoin” by btckeychain is licensed under CC BY 2.0
Why Is Bitcoin Growing in Popularity?
Industry experts, those who plough multiple hours of studying the ins and outs of bitcoin, are in a bullish mood. They are almost unanimous in thinking the price of bitcoin will continue rising for the remainder of the year, throughout 2021 and beyond.
It is almost impossible to conceive you could purchase one bitcoin for $4,106.98 as recently as March 2020 and that same bitcoin would be worth more than $19,800 today. No wonder bitcoin is the talk of the town.
Bitcoin’s meteoric rise is partly down to investors using it to store wealth instead of traditional methods such as purchasing gold. The yellow precious metal has long been man’s go to resource for storing wealth; even countries have gold stores.
Gold and bitcoin have some striking similarities. Gold is rather scares, slow and difficult to mine, and has a finite supply. Doesn’t that sound like bitcoin, too? Working in bitcoin’s favor is the fact it is portable and more divisible than its cousin, gold. The industry standard for purchasing physical gold is in Good Delivery bars weighing 12.5 kilos or 400 ounces. These can set you back $700,000 at a time plus you have a huge slab of gold to worry about. You can buy smaller amounts, of course.
Bitcoin are stored in a digital wallet and you can buy the smallest amounts as you see fit. Try purchasing $10 worth of gold from a dealer!
Why Is The $20,000 Resistance Level Important?
The price of bitcoin almost hit $20,000 back in December 2017 when it topped the scales at $19,783.06. A number of factors resulted in continual falls until it bottomed out at less than $3,300 per BTC 12-months later. Many investors are worried the price will follow a similar course this time around.
Breaking through the $20,000 barrier is an important test for bitcoin and one investors and traders alike are watching with serious interest. This remarkable figure would be the give bitcoin its highest value in its 11-year history.
“Bitcoin accepted here” by commensaFamily is licensed under CC BY-SA 2.0
The price’s behavior if it hits $20,000 is what experts are waiting to discover. $20,000 is a nice, round number and these numbers are where some investors traditionally cash in on. This happens in the stock market where a security hits a certain price and the person or company holding that stock decides to sell their holding and lock in their profits.
A sudden influx of people selling bitcoin, possibly in large quantities, could send the price spiralling down. This is especially true if those holding larger quantities of the cryptocurrency have automatic sell orders in place. Such tools can decimate a stock’s price and that of any currency crypto or physical.
There are, however, levels of support which should prevent his from happening. Couple that with the fact most cryptocurrency experts believe bitcoin’s price will continue rising past $30,000, especially with huge companies like PayPal buying up freshly mined bitcoin.
Nobody truly knows what will happen if bitcoin hits $20,000 or, indeed, if that lofty target will ever be hit. We should find out one way or the other by the end of 2020.