Bitcoin Price May Go Beyond $20,000

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Bitcoin

Bitcoin is setting new yearly highs, and the question on everyone’s mind is if the trend will continue the rest of the year. So far, since February the first positive month, bitcoin has been on the rise most of the time.

Analysis by experts like Tom Lee have pointed out that the rise of bitcoin’s price to beyond $10,000 likely triggered the fear of missing out (FOMO) among potential investors. Lee gives bitcoin a stamp of approval in taking out its all-time high. But not all analysis has matched, Tone Vays disagrees with Tom Lee.

Speaking to CoinTelegraph, Vays says that he doesn’t think the $10,000 benchmark is important as it did nothing to slow down the price back in 2017.

Institutions In The Driver’s Seat

When bitcoin broke out in 2017, the main factor that drove the prices to near $20,000 is retail investments. In 2019 however, the public is still in the sideline, at least according to google trends.

Back then, a time like this, bitcoin google searches were blowing over the roof. Today, they are only 10% of what they were in 2017. This could mean that retail investor FOMO is yet to start and that could mean prices will skyrocket to beyond their 2017 limits

Also, institutional demand for the flagship currency is unlike any other time. As it stood on June 17, open interests from the CME group saw over 5300 contracts totaling over 26500 bitcoins. These numbers have dwarfed the figures recorded in 2017’s peak.

There are other indicators like the GBTC price premium that suggest the coming in of smart money

Better Network Fundamentals

According to CoinTelegraph, at over 65 million TH/s, hash rates have reached a new all-time high. This means that bitcoin is more secure than ever. An unfathomable amount of power would be required for there to be an effect on the network

Other fundamental factors alongside hash rate includes transaction volume and block size, which confirms that more people than ever before are using BTC.

In addition, network transaction fees remain low as compared to 2017. Optimization from Segwit and Lightning Network help ease congestion.

Bitcoin Halving Approaching

The rally to five figures also happens to come before block reward halving set for May 2020. Mining rewards were set to be halved from 12.5 to 6.25.

Bitcoin-halving-approaching

The previous halving in 2016 preceded before the skyrocketing of bitcoin prices. This time, however, BTC/USD is front running

Macroeconomics

For low time preference investors, bitcoin price moves are not of importance. They are however confident that its fixed supply will outperform fiat currencies

Mario Draghi, The Europeans central bank head says that a momentary stimulus is coming regardless of whether the situation improves or not. It is an increasingly dovish tone by the central bank head

On the other hand, US president Donald Trump criticized Draghi saying that it could spark European competition against the US.

In conclusion, the immediate future of bitcoin investors look bright for investors looking to dump the depreciating fiat. Investors are beginning to realize the true potential of bitcoin’s supply.

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