In 2009, Satoshi Nakamoto introduced Bitcoin and then vanished without a trace. Since then, Bitcoin and other cryptocurrencies have followed a similar, volatile trajectory. So, just how good is it as an investment?
Like any investment, there is risk and reward. Read on as we give our Bitcoin predictions for the coming year.
Bitcoin has always verged on mainstream acceptance. However, it has never quite made the tip over into accepted financial society. It has been niche because few people used it, and few people used it because it remained niche.
2020 saw a lot of changes to this. Major platforms like Paypal began to accept Bitcoin. 2021 will undoubtedly build upon this, possibly with major banks accepting cryptocurrency or at least providing ways to house digital assets.
It Will Have Record Highs by the Year-End
As Bitcoin begins to attract investments from institutions, its price will get higher. A halving event has also reduced the supply of Bitcoin, in turn increasing its value. It has now already had its third halving and is trading at $50,000.
This means many investors and financial analysts are predicting its steady rise over the year. In some instances, it has been predicted as reaching $300,000 by the end of the year. Other short-term investments you can make in 2021 can be found at ByteFederal using this link.
Bitcoin prices are synonymous with volatility. As they are not tied to fiscal or monetary policies, they will always have quick highs and lows. This means big losses, and big gains, are possible.
With so many predictions about its soaring value, many investors could start moving money into it driving prices up. However, they may also decide to back out, sending it crashing. Nothing is certain except the uncertainty of it all.
As Bitcoin becomes more accepted, it proves it is a method that works. This will, and already has, been seized upon by big tech companies. A digital currency works and has value, so it is certain they will create them.
Facebook and Google have already made movements towards bringing in their own payments. This cuts down on transaction fees they may be paying. With the chance to cut down on such a huge outlay, why wouldn’t they create currency?
All of this brings with it tougher regulation. We have already seen this in countries such as China. However, it is inevitable that it will come to Western Economies soon after.
There are still serious concerns over cryptocurrencies. Despite moving forward, it still allows for fraud and tax avoidance. In the US, how the Biden administration will deal with this has yet to be seen.
Bitcoin predictions are volatile to begin with. However, if the past years have taught us anything, it is that things can change in an instant. Only invest what you are willing to lose.
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