The past two months have been quite impressive for Bitcoin and the broader cryptocurrency market. Prices are looking up again, and coins are taking a bit of a breather after many of them crossed their all-time highs to set new ones.
Considering how well Bitcoin has especially performed, many of its fans still believe that something huge could be coming for the top cryptocurrency before the year comes to an end. The most common prediction for most people? $100,000 by the end of 2021.
The Good Times are Back
There’s no denying that Bitcoin is crushing it right now. After the effects of the market downturn that took its price lower than $30,000 back in July, Bitcoin is back and is now looking stronger than ever. It did especially well in October, rising as much as 39 percent in the month to cross $60,000 for the first time since April.
Then, in November, Bitcoin broke through its previous high of $64,000 and set a new zenith point just close to the $69,000 mark. Indeed, Bitcoin’s price has since dipped - in fact, it went closer than the $60,000 mark once more this week. But, investors and traders understand that consolidations like these tend to set the stage for higher gains soon. So, most people remain confident of more gains over time.
According to data from HODL Waves, most investors remain highly confident of bigger gains to come. So, they’ve decided to keep their BTC instead of selling. HODL Waves tracks the age distribution of unspent transaction outputs. It shows that the total supply of Bitcoin controlled by hodlers over the past year has increased to 21.4 percent as of November 17.
At the same time, there has been just a slight increase in the number of coins held for several years. This means that only modest selling has taken place. The Crypto Fear & Greed Index has slipped to a neutral point of 54, but that’s just because of the slight dip in the market. When prices rise again, so will investor sentiment.
What Needs to Happen to Bitcoin to Hit $100,000?
The question of whether Bitcoin can hit $100,000 this year is an interesting one. After Bitcoin hit $50,000, it became evident that the coin was looking to hit even bigger highs. Analysts at Standard Chartered recently predicted that Bitcoin will hit $100,000 in the late months of 2021 - or in the early parts of 2022 at least. The company’s analysts predicted that gains in Bitcoin will also trickle down to other cryptocurrencies - particularly Ether.
So, what could it take for Bitcoin to actually hit $100,000?
Adoption from A Large Company
Cryptocurrencies have always thrived on adoption and growing acceptance from companies. When a notable organization confirms that it will accept a cryptocurrency, increased transaction volumes would immediately follow - leading to a growth in demand and price.
Last year, we saw something similar when PayPal announced that it would be integrating cryptocurrencies into its service. PayPal is the world’s top payment processor, and the company’s decision to accept digital assets meant a massive boost for the industry.
This year, however, adoption hasn’t exactly hit the strides of 2020. Companies like PayPal have seen massive benefits of their crypto adoption, but the industry is hungry for something more as the year draws to a close.
We’re already seeing some signs, with AMC Theaters accepting crypto for payments and Amazon publishing a job listing for a blockchain and crypto specialist to join its Amazon Web Services (AWS) team. But, the industry still needs that massive announcement to push things forward.
Big Investments Pouring In
Bitcoin rose to its lofty heights last year thanks to institutional adoption going through the roof. Last year alone, companies like MicroStrategy, Ruffer Investments, and Square poured billions of dollars into crypto as they diversified their portfolios to include digital assets. This height in demand led to Bitcoin’s price surging significantly.
Something similar will definitely help Bitcoin right now. On February 8th, Tesla announced that it had invested $1.5 billion into Bitcoin. That same day, Bitcoin’s price jumped by 21 percent. If a large company makes a similar investment right now, it could give Bitcoin the push it needs to break its current high and march towards $100,000.
ETF Fever Continues
Exchange-traded funds (ETFs) have been in the news recently. These instruments offer investors a new way of buying Bitcoin, but a pure Bitcoin ETF has remained stalled at the regulatory front.
In the past two months, several Bitcoin-related ETFs have launched, but they all track Bitcoin futures price - not Bitcoin itself. The ProShares Bitcoin Strategy ETF, which was the first to be greenlit in the United States, is doing impressive numbers and is now in the top 2 percent of all ETFs ever launched. Other Bitcoin futures-tracking ETFs have done pretty well.
But, the industry needs more. The Securities and Exchange Commission (SEC) rejected a Bitcoin-tracking ETF proposal this month, showing that the agency is still unconvinced about the safety of pure Bitcoin ETFs.
For now, several factors could push Bitcoin above the $100,000 mark. Regardless of what happens, the next few weeks are sure to be pretty exciting for the market as prices start to adjust once more.