Crypto News Updates

Life After $20K: Where Will Bitcoin Go After Breaking The All-Time High?

The cryptocurrency landscape has been obsessed with the famous bull run of Winter 2017, but as bitcoin has surpassed its all-time high price of $19,655, the world of crypto may be venturing toward uncharted territory. 

There are many factors that went into the mix in creating the right environment for bitcoin to surpass its highs of 2017. The COVID-19 market crash during the spring of 2020 saw BTC fall to around $5,000 momentarily before the prospect of a strong recovery drove fresh investment. Bitcoin’s movement was further bolstered later in the year by the news that PayPal would be accommodating the buying and selling of the cryptocurrency, as well as uncertainty wrought by the U.S. presidential election. 

Source: CoinTelegraph

But what happens next? Bitcoin in recent weeks has recorded a sharp rise in value, gaining as much as 45.8 percent in just one month and crossing an all-time price high, per numerous exchanges. But is the rise sustainable? Or will the world’s most popular digital asset come crashing back down to earth? 

Building On Market Capitalization

Significantly, bitcoin’s market capitalization has grown alongside its snowballing price tag. The market cap of bitcoin surpassed its own all-time high mark on November 17, 2020. The growth of bitcoin’s market capitalization has been so astronomical that it’s now surpassed the likes of PayPal, Netflix, Coca-Cola and Disney to sit among the top 18 largest commercial companies in the world. 

The larger the market cap, the more sustainable a significant price run is likely to be. This latest boost to bitcoin’s market capitalization has been driven by significant investment from companies like Square and MicroStrategy, as well as the larger levels of accessibility that’s been provided by PayPal making the digital currency available to its 286 million-strong userbase. 

In another boost to the appeal of bitcoin, the cryptocurrency’s supply is being squeezed following its halving event earlier in 2020 — this is due to less bitcoin being released as a mining subsidy per block.

Changing Investor Behavior 

Following bitcoin’s 2017 rally, a significant crash occurred that the crypto market spent much of the following two years picking itself up from. However, investor behavior today appears to be different to that of 2017.

Source: CoinDesk

As the chart above indicates, bitcoin has become a far more popular asset for investors on the run-up toward 2020. More wallets that typically buy and hold cryptocurrencies are turning to bitcoin as a crypto safe haven, while fewer cryptocurrency wallets are involved in high magnitudes of trading. 

The chart also shows that there’s a correlation between a slowing of holder accumulation and a fall in the value of bitcoin. More long-term investment should mean more stability and sustainability when it comes to growth, and as we can see, there’s no sign of long-term BTC investment slowing down right now. 

The present landscape also has a significant number of high-quality and trustworthy crypto exchanges that have emerged since 2017. This has further helped to leverage growth and confidence in newer investors in a way that can help safeguard bitcoin’s long-term trajectory.

Paving The Way To The Moon

“Back in March, I predicted that BTC could reach $50,000 by end-2020 and now there is increasing evidence of that upward trend,” said Antoni Trenchev, co-founder and managing partner at crypto platform Nexo, speaking to Decrypt.  “Markets like round numbers — Bitcoin passed $16,000, then $18,000 in a matter of days. The next stop is $20,000,”

“$50,000 by the end of this year is not at all unlikely,” he continued. “This will be a record not driven by frenzy, but by the big, forward-thinking, finance and technology-savvy institutions that will push crypto into the mainstream.”

Could bitcoin be heading to the moon? Some commentators are claiming that the cryptocurrency will hit highs of $300,000 within a year, fuelling speculation that this could be a key moment in bitcoin’s mainstream adoption. 

According to a leaked Citibank report, a future bitcoin rally “could potentially peak in December 2021… Suggesting a move as high as $318,000.” 

“Improbable though that seems it would only be a low to high rally of 102 times (the weakest rally so far in percentage terms) at a point where the arguments in favour of bitcoin could well be at their most persuasive ever,” the report, entitled “Bitcoin: 21st Century Gold,” claimed.

The Dangers Of Volatility Remain

However, investors need to be aware that although the outlook seems promising surrounding bitcoin, the world of cryptocurrencies has been punctuated by spectacular rallies before devastating losses occur. 

According to Fortune’s The Ledger newsletter, “the short answer is that a collapse is all but inevitable — assets that go up 400% are due for a correction.” However, the article noted that a future fall won’t be nearly as severe as before, due to the volume of investment within the currency. The article concludes that this might mean that a future correction could leave bitcoin at around $8,000 — as opposed to $2,000 — signifying a potential area for new investors to wait for before making a purchase. 

Today, bitcoin looks stronger than ever, so it’s perfectly in-character for cryptocurrency commentators to be predicting lunar launches to over $300,000 as well as crashes toward $8,000 in the same calendar year. 

As the world’s most famous cryptocurrency surpasses its all-time high price, it will enter uncharted territory. But with the backing of high volumes of long-term investors and the support of huge international payments corporations, the bull run of 2020 may well put an end to the nostalgia of 2017’s millionaire-making chaos. 

This is a guest post by Peter Jobes. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

The post Life After $20K: Where Will Bitcoin Go After Breaking The All-Time High? appeared first on Bitcoin Magazine.

Source: Bitcoin magazine

Crypto News Updates

Palling Up To Crypto: Could PayPal’s Bitcoin Accommodation Lead To Widespread Adoption?

The autumn of 2020 has been a lucrative one for bitcoin investors, with the world’s most famous cryptocurrency being awoken from a bearish end to the summer with the news that payments giant PayPal was set to begin accommodating BTC payments within its 346 million global user base. 

(Image: CoinGecko)

With the news of PayPal’s accommodation of Bitcoin emerging on October 21, we can see a significant rise in the value of the cryptocurrency leading to BTC almost reaching highs of $14,000 before a correction took place. 

However, the long-term impact of PayPal accepting the buying, selling, holding and spending of bitcoin within their accounts could lead to huge levels of adoption of the currency. Could we be on the verge of an era of unprecedented growth for both Bitcoin and the world of crypto as a whole? 

A “Pivotal Moment” In Bitcoin’s History

The arrival of PayPal accommodating Bitcoin represents the biggest single step that any cryptocurrency has made toward mainstream adoption in over 10 years of existence. 

In the past, cryptocurrencies have been met with scepticism from would-be adopters due to its links to the black market and shady dealings, but the arrival of a major player in finance will not only supply its users with the opportunity to invest in Bitcoin (though, critically, not directly on the Bitcoin network) but can also go a long way in establishing a new level of confidence in consumers who were fearful of investing before. 

Jason Deane, an analyst at Quantum Economics, told Decrypt that PayPal’s announcement regarding its accommodation of bitcoin “could very much be the moment that is considered pivotal when the Bitcoin history books are written.”

“In my view, this is an extremely significant move for cryptocurrency adoption that is likely to expand Bitcoin’s reach at a vastly accelerated level, drive the development of additional services and serve as a rock-solid endorsement of the concept of cryptocurrency leading to further institutional involvement,” Deane explained. 

Entering A Market Of 346 Million Users

One vitally significant aspect of PayPal’s move to accommodate bitcoin is the fact that it, along with other cryptocurrencies like bitcoin cash, ether and litecoin, can now be used to shop with the firm’s 26 million merchants across the world from 2021 onward. 

With over 346 million users, PayPal has provided a brand-new layer of practicality for cryptocurrencies that can help its users not only invest in bitcoin but also spend it as if it were a fiat currency within its network. 

Furthermore, PayPal appears to understand its role in propelling cryptocurrencies into the financial mainstream, and the company’s President and CEO Dan Schulman has spoken of the challenges that the payment giant expects to face in opening bitcoin up to wider audiences. 

“Our global reach, digital payments expertise, two-sided network and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption and interoperability of these new instruments of exchange,” Shulman explained, per Finextra. “We are eager to work with central banks and regulators around the world to offer our support, and to meaningfully contribute to shaping the role that digital currencies will play in the future of global finance and commerce.” 

With the price of bitcoin hovering above the $16,000 mark at the time of writing, mass adoption could see the value of investments in the currency rise exponentially — making the coin an attractive proposition for those looking to find an asset that can appreciate faster than traditional stocks and shares. 

But what about the notion of adopting Bitcoin with the intention of spending on grocery shopping with PayPal? The scalability of coins with older blockchain frameworks like Bitcoin could be troublesome for any meaningfully practical applications. Currently, Bitcoin is able to process up to seven transactions per second — a far cry from Visa’s 24,000 transactions per second. 

While this could be a problem in terms of practical usage, some altcoin networks like Ripple have the ability to handle as many as 1,500 transactions per second. And second layer applications for Bitcoin like the Lightning Network are actively iterating toward faster and more efficient BTC transactions.

Risks To Bitcoin Adoption

One of the most significant issues in PayPal’s adoption of cryptocurrencies stems from the fact that the platform is offering a “custodial service” to users. This means that, despite having the power to buy and sell bitcoin, users won’t actually be able to hold their assets or transfer them to other wallets. Cryptocurrency commentator and the leader of Lightning development firm Zap Jack Mallers explained on Twitter that this move effectively renders PayPal bitcoin as “more or less a separate asset confined to the PayPal network.”

Also, there may also still be uncertainty as to whether the cryptocurrency can overcome the threat of new rivals entering the market. 

Many of the world’s biggest economies are looking to make their way into developing central bank digital currencies (CBDCs), with powerhouses like China already leading the way with its own digital yuan. However, both the U.S. and EU have also been exploring the prospect of transitioning into CBDCs also. 

Last month, European Central Bank President Christine Lagard commented that a digital euro currency should be issued to trade alongside the fiat version, with the traditional Euro ultimately being phased out soon after. 

As more of the world’s largest central banks and large corporations transition towards digital currencies, it seems inevitable that Bitcoin will soon have to face the threats of new competitors backed by global governments. Global central banks will likely make moves in order to continue their control over the issuance of money supply, and future governmental regulations to clamp down on decentralized cryptocurrencies like bitcoin could hinder the progress made by PayPal’s foray into crypto. 

Bitcoin’s move into the financial mainstream was never going to be an easy one, and there’s bound to be great hurdles to overcome in the future. But for now, the world of crypto should rejoice at the arrival of PayPal, and the biggest leap yet towards a new frontier of mass adoption. 

This is a guest post by Peter Jobes. Opinions expressed are entirely his own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

The post Palling Up To Crypto: Could PayPal’s Bitcoin Accommodation Lead To Widespread Adoption? appeared first on Bitcoin Magazine.

Source: Bitcoin magazine