Many people are interested in and speculate about the Bitcoin price trend in 2020. The price of Bitcoin, the first and most well-known cryptocurrency in the world, has been particularly erratic and turbulent this year. In this article, we will examine the numerous elements that have shaped the price trend of Bitcoin in 2020, evaluate the performance of the cryptocurrency during the year, and evaluate its prospects for the future.
Overview of Bitcoin’s past
Under the alias Satoshi Nakamoto, an unidentified person or group of people created the digital currency and payment system known as Bitcoin in 2009. Users are able to send and receive payments using the system without the aid of a central authority or third-party mediator thanks to its decentralized, peer-to-peer networking architecture. Blockchain is a distributed ledger technology that records and validates all transactions, and it powers Bitcoin.
After starting to trade in 2010, bitcoin’s price increased progressively until 2017, when it hit an all-time high of around $20,000. Bitcoin’s cost decreased during the following two years, reaching a low of $3,000 in 2019. Since then, the asset has attracted more attention, which will cause its price to increase in 2020.
The Volatility of Bitcoin
Bitcoin is a dangerous investment because of its wildly fluctuating price. This is because of a number of things, including its scarcity, the absence of inherent worth, and a lack of control. The asset is also quite vulnerable to market manipulation, as shown by the U.S. Securities and Exchange Commission’s most recent claims of market manipulation (SEC).
Nevertheless, despite its turbulence, Bitcoin has turned out to be a successful investment for those who have been able to take advantage of its price fluctuations. For instance, the growing price of Bitcoin has led to a rise in new traders on the popular online trading site Bitcoin Evolution in 2020.
Bitcoin Price Influencing Factors
Bitcoin’s price is affected by a number of variables, including its limited supply, market sentiment, the regulatory landscape, and general macroeconomic conditions. One of the primary factors influencing the price of Bitcoin is its limited supply. There are only ever going to be 21 million Bitcoin in existence, and as more individuals purchase the asset, its scarcity rises, driving up its price.
The state of the market has an impact on Bitcoin’s price as well. The price of the asset may rise in response to good news and developments like growing institutional interest, while the price may fall in response to bad news like government crackdowns. Since some nations have more favourable rules than others, the regulatory climate also affects the price of bitcoin.
Finally, the state of the global macroeconomy has an impact on the price of bitcoin. For instance, investors sometimes turn to safe-haven assets like Bitcoin during times of economic uncertainty, such as the current COVID-19 outbreak, which raises the price of the asset.
Performance of Bitcoin in 2020
The year 2020 has had a very erratic Bitcoin price pattern. The asset was worth around $7,200 at the start of the year. It increased to almost $10,000 by mid-February before falling to little over $4,000 in mid-March as a result of the coronavirus outbreak.
But since then, the cost of Bitcoin has increased and is currently trading at about $12,000. This is partly because institutional investors are becoming more interested in the commodity; businesses like Square, Microstrategy, and PayPal have all made investments in Bitcoin. Additionally, the Chicago Mercantile Exchange (CME) and the Intercontinental Exchange are now able to list Bitcoin futures contracts after receiving recent approval from the U.S. Commodity Futures Trading Commission (CFTC) (ICE). Due to these changes, the value of Bitcoin has increased and institutional investors now have easier access to the asset.
The Relationship Between Bitcoin and Conventional Assets
Bitcoin is frequently contrasted with conventional assets like equities and gold. The asset’s historical correlation with traditional assets has been minimal, therefore its fluctuations are unaffected by those of traditional assets. The link between Bitcoin and conventional assets, however, has dramatically strengthened in 2020. The expanding institutional interest in the asset and the increase in demand for safe-haven assets as a result of the coronavirus epidemic are probably to blame for this.
Coronavirus’s effect on bitcoin prices
The price of Bitcoin has been significantly impacted by the coronavirus epidemic. The asset’s price first dropped as a result of the worldwide economic slump. But as the epidemic spread, investors started to swarm to safe-haven assets like Bitcoin, driving up the price of this digital currency. The asset’s recent ascent has also been aided by the growing institutional interest in it.
Analysis on the Future Price of Bitcoin
The highly volatile and unpredictable nature of the commodity makes it challenging to forecast the price of Bitcoin in the future. On the basis of the state of the market, however, some reasonable judgments can be made. Analysts predict that the price of Bitcoin will rise further in the near future as a result of growing institutional interest in the asset and the present state of economic turmoil throughout the world. In addition, the growing availability of Bitcoin-related goods and services, such as payment options, may boost interest in the commodity and drive up its price.
Guidelines for Bitcoin
An essential element that can affect the price of Bitcoin is the regulatory landscape. Except for the United States, where it is subject to both federal and state laws, the asset is currently unregulated in the majority of other nations. Additionally, some nations—like China and India—have outlawed the use of Bitcoin and other cryptocurrencies, while others—like Japan and South Korea—have implemented more liberal policies and laws to promote the usage of the commodity.
In 2020, the price trajectory for bitcoin has been erratic and unexpected. A number of variables, including the asset’s limited supply, market sentiment, the regulatory landscape, and the state of the world’s macroeconomic conditions, have an impact on the asset. Additionally, the asset’s price has been significantly impacted by the coronavirus outbreak, increasing demand for it. The price of Bitcoin is likely to rise further in the near future, as evidenced by the growing institutional interest in the asset and the present state of economic turmoil throughout the world. The regulatory environment is a significant aspect that can affect Bitcoin’s price, to sum up.