At the beginning of January 2021, Bitcoin set a new record-breaking price point, surpassing the $42,000 mark. Many experts believe that this is still far from the limit.
For instance, the investor and co-founder of Fundstrat Global Advisors said that by the end of the year, the price of Bitcoin could reach $100,000. The Winklevoss brothers predicted that the cryptocurrency would grow to up to $500,000 in value in the next five years.
Russian experts have been more restrained in their forecasts, but don't deny that the price of Bitcoin will go up. "How much could Bitcoin be worth, and is it worth investing in this asset?" is the main interview topic with Anti Danilevski, CEO of the KickEX Cryptocurrency Exchange.
Anti, Bitcoin is recognized as the most profitable asset of the last 12 years. The price of Bitcoin went up and down constantly. What can we expect from BTC in the near future?
A.D.: One of the most popular phrases in trading is "history repeats itself". We are currently watching the situation that occurred at the end of 2017 repeat itself, when Bitcoin demonstrated another cycle of rapid growth after updating its historical highs.
At that moment, the search queries on Bitcoin and cryptocurrency were off the charts; various celebrities were commenting on their investments in cryptocurrency, and novice investors were looking for options to invest their fiat money into cryptocurrency in the best possible way.
Along with the rise in the price of Bitcoin in early January, the volatility of the cryptocurrency has increased sharply. How will this affect the market?
A.D.: Of course, the rise in price of Bitcoin has brought with it the volatility of the market, which may eventually lead to a slight pullback in value. This is, however, quite normal for the cryptocurrency market.
Again, it is worth paying attention to the history of market development: a growth has always been followed by a fall, and then a rapid growth again.
Currently, we're seeing another growth cycle by Bitcoin that has pleased cryptocurrency investors. The BTC price began its growth back in October and after a brief consolidation near its historical high of $20,000, it grew, reaching $29,000 by the end of the year.
Since the beginning of the year, the price of BTC has continued to grow and is currently trading in a range where the upper boundary is a new high of $42,000 and the lower of $30,000.
What will happen in the near future with the rate? When can we expect the lows?
A.D.: If we look at the past history and analyze the previous growth cycles, we can assume that there is a certain pattern that can be used to estimate BTC's growth potential.
Looking far into the past, when BTC was at about $13 and the active growth phase began, we see the approximate growth from the previous historical maximum to the new one at around 9000%. Then, following the next historical high of $1,100, BTC reached $20,000, about 1,500%, which is 6 times less than the last time.
At this point, given that the cryptocurrency and BTC market is moving to a more mature stage, as evidenced by the volume of trading and the number of participants, we can assume the nearest potential growth, after the renewed historical high of 250%, which in price terms will come out to be $65,000 per BTC.
What are the main factors that have influenced the new huge surge in people's interest in cryptocurrency? How will it affect fiat currencies?
A.D.: One of the main factors that had a significant impact on the price of BTC and the cryptocurrency market was the COVID-19 epidemic. After the panic sale of cryptocurrencies in March, the most farsighted investors quickly realized that the pandemic would have a negative impact on the real sectors of global economies that operate offline, and they began to build cryptocurrency portfolios.
To support their economies, governments began to expand stimulus programs and make additional issues of fiat currency, particularly the U.S., which also allowed Bitcoin to gain value.
Many institutional and large investors decided to play on this and buy a significant part of the BTC supply from the market, including Grayscale Investments (about 600,000 BTC), MicroStrategy (70,470 BTC), Ruffer Investments (45,000 BTC) and Square (4,709 BTC).
In addition, the unstable political situation in the U.S, where a change in president is accompanied by nervousness across the country, helps Bitcoin grow. This, in turn, increases the risks of investing in the U.S. stock market. But in the given case, many investors' appetite for risk and yield remains, especially when they see another BTC bull run.
Admittedly, many of them have not yet decided to invest because for many hedge funds, the volatility of BTC is too risky. Take BTC's 27% correction after the $42,000 level test, for example. But the longer the cryptocurrency market exists, the more participants come to it and thus trading volumes increase, making it more efficient.
As for fiat currencies, cryptocurrencies are developing in parallel and so far cannot have a serious negative impact on them. On the contrary, we see that after the rapid growth in popularity of cryptocurrencies, governments began to impose restrictions on the use of digital currencies.
For example, the U.S. and the U.K. are already developing rules to regulate the circulation of stable-coins. Russia prohibits the use of cryptocurrencies as a means of payment. Here, I tend to think that the crypto market will grow as long as it doesn't have a serious impact on the global economy.
As soon as governments feel threatened by Bitcoin and other coins for their national currency and their country's economy, every measure will be taken to limit the circulation of digital currencies.
Is it worth investing in Bitcoin today?
A.D.: It's important to understand that investing in cryptocurrencies involves risk, because the price is highly volatile.
To protect yourself from unnecessary losses, it's important to approach investing thoughtfully and build a portfolio of cryptocurrencies, gradually gaining positions in different instruments.
It's worth noting that after this rally, Bitcoin is in the top 10 global ranking of assets by capitalization, next to the stocks of companies such as Apple, Amazon, Tesla, Microsoft and others.
But Bitcoin is not a stock and the potential for its distribution and use is much higher because BTC is also a means of payment that is gaining in popularity.
An important point is that central banks in many countries are already actively adopting blockchain technology and testing the issuance of their digital currencies, which could significantly expand the scope and popularity of cryptocurrencies.
Bitcoin can be purchased on both our KickEX exchange platform and on P2P platforms. However, it is worth keeping the security of transactions in mind. In addition, I would recommend constantly improving your knowledge about this asset, as new technologies come to the cryptocurrency market almost daily.
For example, on our academy website — KickAcademy — we have compiled an entire collection of educational articles. You can also find educational materials on other open sources.