Cryptocurrency is known for its volatility. It has burned more than its fair share of investors over the years. A good example of this was the 2018 price drop of Bitcoin after its December 2017 spike of almost $20,000 USD.
That drop did shake the confidence of Bitcoin backers and investors. Still, that sudden spike was not sustainable and was bound to happen, so what makes this current boom period different from the 2017 spike?
Over the past three months, Bitcoins price has been slowly increasing at a steady pace which is already different and has made many more people excited. This is because when something is consistently growing over a long period, it shows that there is a real interest and legitimate reason for its increase. A spike, however, comes after a particular event where people seem to jump on the hype train and ride it until the wheels fall off.
Back in 2017, the only thing backing Bitcoin was its blockchain technology and most of the world was still unaware of what Bitcoin was. Right now, it seems everyone is talking about it including respected investors and major company strategists.
Bitcoins price is $19,535 AUD which is already incredible but when you look at its starting price in January, which was around $11,000 AUD you can see its impressive increase. This increase is not just because a few people have hopped onto the bandwagon.
Not only has Bitcoin been approved by multiple high up business personals, but major companies are backing it as well such as
. They have announced they will allow its users to buy, store and sell Bitcoin along with several other cryptocurrencies on their platform starting in 2021. VISA has also partnered with Coinbase, an online exchange and wallet, that will allow Americans to spend their Bitcoin and other cryptos on everyday items.
This upcoming VISA card will help bridge the gap between cryptocurrency and regular currency which is the very thing that Satoshi Nakamoto (the inventor of Bitcoin) wanted.
When taking all these things into account, along with the recent halving event which has shortened the supply of Bitcoin. We can start drawing conclusions as to why Bitcoins price has been increasing and it comes down to the idea of a bull market.
A bull market is a situation where the supply of a product is slowly going down while the demand for that product is either the same or slowly increasing thus driving the price up. The supply of Bitcoin will only get smaller and if the real-world applications of Bitcoin continue to increase, then we could see Bitcoins price climb even higher than the 2017 spike.
It is an exciting time to be part of the cryptocurrency community, and if you want to keep up with Bitcoins price and see how high it will get, use our crypto tracker on home page.