Two days into 2021 and Bitcoin price has grown so high that it topped the $30,000 mark for the first time in history. From there it went to $31,000. Then, it went over $32,000. At the moment of writing, the BTC price is well over $33,000.
What this means is that those who bought some Bitcoins in December have already made a 50% profit. And those who bought it while it was at its lowest price of 2020 – at the moment when the COVID-19 pandemic started heating up in the US – now have almost 8x the investment.
Although we at Cryptocurrency365 did predict Bitcoin would go over $20,000 by the end of 2020, we didn’t think its price would skyrocket in the first couple of days of the new year. So, what are the reasons behind Bitcoin’s sudden surge?
Reasons Behind Bitcoin’s Surge at the Start of 2021
There are literally hundreds of reasons why the price of Bitcoin is going up. No one can say for certain which reason is the most important, but according to cryptocurrency experts from Yahoo Finance, there are a few things behind the recent drive, including:
- Adoption of Bitcoin (and other cryptos) by big financial companies, most notably PayPal, which now allows Americans to buy/store/sell BTCs.
- Trend of big-name investors switching from fiat to digital currency. In December 2020, we saw Skybridge Capital buying Bitcoin for $182 million and MassMutual investing $100 million in the world’s most popular crypto.
- A growing number of Bitcoin whales – owners of at least 1,000 BTCs. On Wednesday, December 30, their number reached 1,994, thus breaking the previous record. At the moment of writing, there are over 2,000 Bitcoin whales in the world.
- A growing narrative that Bitcoin is “digital gold.” This talk is backed by a number of reputable financial experts including Mike Novogratz, Barry Silbert, and Dan Morehead.
On top of everything, the fact that Christmas and New Year Eve celebrations were canceled in many parts of the world meant that people had no where to spend money. Instead of keeping it in the bank, many decided to invest it in Bitcoin over the last couple of weeks.
Bitcoin Price Predictions for 2021
No one can predict the future, but some investing experts are convinced we haven’t seen the best of Bitcoin yet this year. Even though the price might drop slightly, it shouldn’t go below $25,000 or $30,000 – that’s according to pessimists.
Optimists, on the other hand, believe that the Bitcoin price in 2021 could go to over $400,000. One of the financial gurus who believe this is Guggenheim Investments’ chief investment officer Scott Minerd.
In an interview he gave to Bloomberg Television in mid-December, Minerd practically predicted the surge Bitcoin is having right now. If all of his predictions come true, this time next year, the price of one Bitcoin will be over $400k.