Bitcoin has reached its highest price in the year 2021. This increase was directly related to new collaborations, visibility to new people etc. Most estimates indicate that almost all Bitcoin will be mined by around 2140, at which point there will be about 21 million Bitcoin, compared to just under 19 million today.
Falling and bouncing
In May 2021, in the space of a week, bitcoin lost about 20 percent of its value, while ether declined nearly 30 percent and dogecoin around 10 percent. By Wednesday, bitcoin had even fallen to around $36,500, its lowest level since early February 2021 and its biggest 24-hour drop since March 2020. Recall that the price of the queen of cryptocurrencies, which was flirting with $65,000 in mid-April 2021 and has still risen more than 380% in a year (the price of ether also remains historically high), generally influences those of the majority of altcoins, a.k.a. alternative cryptocurrencies. Even more impressive, the global market capitalization of all cryptocurrencies had fallen by just under $1 trillion in one week, according to data from Coinmarketcap. The heavy drop on Wednesday, May 19, was so severe that it caused malfunctions on exchange platforms such as Coinbase. It is the result of a series of factors (Strengthening cryptoannie policy in China, Tweets from elon Musk and the decisions of large groups like tesla to use cryptocurrencies).
A bursting of the Bitcoin bubble?
If we compare the graph of Internet values between 1995 and 2005 with that of the price of crypto-assets, we can only be struck by the many similarities. One example is the peak reached by the “dotcom” in 2000 and the December 2017 peak of crypto-assets. In both cases, the months following the fall were marked by a stabilization linked to a consolidation of real stocks. For many analysts, crypto-assets are in a “wintering” phase. This period seems to fix Bitcoin’s price on a €5,500 axis, but that doesn’t mean that the value won’t fluctuate up or down. For the most part, it is the framework that is being developed that will influence the future of the price. The coming months should therefore be an opportunity to see more clearly in this very particular field of crypto-assets.
An (almost) imminent rally
Michael Venuto, chief investment officer of Toroso Investments, said in an interview Thursday with Investing.com:
“I expect to see $100,000 this year … we should already be close to that level based on the last halving, but we’re not there because there are confusing narratives [including regulation] that haven’t manifested themselves yet.”
“The recent price action in BTC is going to calm down because the commercial part of this, the part where, bitcoin, other cryptocurrencies and decentralized finance are being used to revolutionize finance is in better shape than it has ever been in history,” Venuto added.
A halving – which halves the reward for mining bitcoin transactions and offering newly minted bitcoins – occurs about every four years. Halving events in 2012 and 2016 preceded previous bullish phases in BTC.
The most recent halving event, in May of last year, reduced the per-block reward for bitcoin mining from 12.5 BTC to 6.25 BTC, and helped to highlight supply and demand, a structurally bullish factor for BTC.
According to many experts, the 2021 cryptocurrency drop has still stabilized nicely and this could bring good news for the months to come. Bitcoin may reach 100,000 euros in valuation by December 2021. The rise of Bitcoin will naturally increase the price of other crypto-currencies (gold shit coin).
