There are at least five crucial reasons for the rise in cryptocurrency prices. Halving, crisis, and dollar problems – these are some of the things that will influence the situation on the cryptocurrency market.
The previous year has brought substantial profits to many Bitcoin holders. Since January, the coin has risen in price by 45%. And if we compare it with the March 2020 situation, when the price of BTC fell to $3,800, the price has increased by 176%. The next year is expected to be even more successful for investors. Well-known representatives of the industry expect that the rate of the main cryptocurrency will continue to rise.
What Can Impact the Situation?
There are some key influencers that can drive the situation:
- Supply and demand greatly affect the price of Bitcoin. The BTC rate rises when the demand for new tokens exceeds supply. This usually happens after Bitcoin halving – when the reward for adding a new block to the blockchain is halved. Such an event of artificial inflation happened in May 2020, and the next ones are expected in 2024, 2028, and 2032.
- The rate is influenced by media coverage. The more its skyrocketing price has been covered in the media, the more people are starting to invest in it. Do you remember when PayPal announced the possibility of paying in Bitcoin? This announcement had made many people invest in BTC.
- The crypto asset is strongly influenced by market competition in the market. Although Bitcoin is the “king of cryptocurrencies,” new altcoins and other high-level cryptocurrencies are starting to attract investors. The good news is that bitcoin is much more resilient to market competition than most altcoins. It hasn’t lost its status as “digital gold” over the decade despite the fact that new cryptocurrencies may be technically more reliable or scalable.
Since the beginning of 2021, the BTC rate has grown by almost 110%, to the current level of $60,000. Having invested $1,000 in this cryptocurrency at the beginning of the year, now the investment result would have shown almost $2,100. It would have been most profitable to buy the first cryptocurrency at the beginning or at the end of January when the price was below $35,000.
If you buy Bitcoin at a price of $60,000 now, then the profit can be about 67%. The $1,000 invested today could turn into $1,670 at the end of 2021. The profit will increase if you predict a “successful” fall. Having bought Bitcoin for $1,000 on March 25, you would have had $1,200 in your pocket today. Although experts predict the price growth, we recommend that you keep an eye on the asset rate 24/7 to be able to identify the best moment for your profitable investment in the future.