Why Bitcoin Might Hit $100K by the Year End in 2021
Bitcoin has found itself engulfed in consecutive bear and bull runs through 2021 and the first half of 2021, peaking at $63,588.20 on April 13th before reaching a seven-month low of $29,789.90 as recently as July 20th.
While this highlights the inherently volatile nature of the asset, however, it’s also interesting to note that the price of Bitcoin (which is now back up to $47,279.50) is now more than four times higher than it was precisely one year ago ($11,329.10).
With the market clearly buoyant and sentiment rising, it should come as no surprise that Bloomberg is predicting that the price of BTC could approach $100,000 by the end of the year. We’ll explore this in further detail below!
A Turbulent Year So Far for BTC
Bitcoin enjoyed a stellar opening to 2021, with Tesla’s investment of $1.5-billion in February sending the asset’s price soaring.
This trend continued through the asset’s peak in mid-April, before Tesla CEO Elon Musk echoed concerns about the energy consumption levels associated with BTC’s mining process. This precipitated Bitcoin’s subsequent bear run, which saw the asset shelve around 50% of its value in barely eight weeks.
Energy consumption definitely has a negative impact on BTC’s market sentiment, with data accrued from the University of Cambridge and the International Energy Agency revealing that Bitcon mining consumes around the same amount of energy as the Netherlands did in 2019.
However, BTC has shown increased resilience of late, thanks partially to rising adoption rate and increased institutional inflows around the world
According to Edward Moya, who’s the Senior Market Analyst at Oanda, Bitcoin continues to consolidate above the upper boundaries of its recently tight trading range, with JP Morgan recently creating a BTC fund for wealthy clients.
While this didn’t immediately help the asset to break above the $40,000 level, it’s indicative of increased support and more sustainable demand within the marketplace.
Currently, BTC is embarked on an upward trajectory, as it continues to flirt with the $50,000 level once again.
So, What Does the Rest of 2021 Have in Store for BTC?
The question that remains, of course, is how far can BTC’s price rise between now and the end of 2021?
Predictions vary from one expert to another, although the general consensus is that Bitcoin is more likely to break the $100,000 barrier this year than it is to dip to $20,000 or below.
More specifically, while the $50,000 mark is expected to provide a temporary cap following the sustained bear run in Q2, this will herald the beginning of a resting crypto-asset bull market that will drive sustained growth for the remainder of the year.
Ultimately, this could see the price of BTC peak at a potential high of $100,000 before the year is out, while it’s highly likely that Bitcoin will remain above $40,000 and revisit its $63,588.20 at some point in the coming months.
This will also be driven by increased adoption and correlation with traditional assets, as 2020 saw BTC’s 260-day volatility drop to its lowest ever level vs. most major alternatives. If this trend continues against the backdrop of increased demand and adoption, we can expect BTC to fulfill much of its price potential for the remainder of the year.
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