Gain insight into the factors driving up the price of Bitcoin. Learn about the latest changes in the world of cryptocurrency. Be aware of the risks you need to be watchful of.

A Brief Summary of Crypto to Date

Here’s a brief summary of Bitcoin to get you up to date on the key developments.

  • 2009 Jan: Bitcoin “Genesis” 1st Bitcoin record
  • 2010 May: Bitcoin Pizza Day – 2 pizzas bought for 10,000 BTC (worth then $25, today $20m)
  • 2011 Feb: Bitcoin price reached $1 USD
  • 2011 Jun: Mt Gox hacked and $8.7m lost
  • 2012 Nov: Halving day where BTC mining rewards reduce every 4 years until mining reward eventually reaches 0
  • 2013 Nov: China cautiously okays Bitcoin market participation
  • 2014 Dec: Microsoft accepts bitcoin as payment
  • 2015 Sep: Bitcoin is officially a commodity
  • 2016 Aug: Bitfinex hacked
  • 2017 Jan: Bitcoin breaks $1000 for first time in 3 years, ushering in mass media coverage
  • 2017 Aug: Bitcoin splits into Bitcoin & Bitcoin Cash
  • 2017 Nov: Bitcoin all-time high at $19,665
  • 2017 Dec: Bitcoin slumps 30%
  • 2018 Apr: Bitcoin lost $120b in 2018 Q1
  • 2019 Jun: SC approves 3 digital asset exchanges (DAX) in Malaysia
  • 2020 Mar: Bitcoin flash crash caused by BitMEX outage
  • 2020 May: Bitcoin halving
  • 2020 Nov: Bitcoin on track towards reaching a new all-time high

 

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Factors Driving Up the Price of Crypto

Here are some of the key factors driving up the price of Bitcoin.

  • Digital payment platforms PayPal and Venmo announced that they will support transactions in Bitcoin and other cryptocurrencies driving an increase in usage and liquidity.
  • Growing institutional investors in Bitcoin as a reserve asset (as an alternative to fiat currency such as USD) e.g. Microstrategy Inc, Square Inc, Slatestone Wealth, Rothschild Investment Corp.
  • More than 1 million daily-active Bitcoin wallets and increasing number of new wallets globally showing increased usage and liquidity.
  • Increase of “stablecoins” (cryptocurrency which maintain price stability in relation to Bitcoin or fiat currency like USD) providing utility and access for cryptocurrency at lower volatility.
  • Increased acceptance with countries issuing or looking to issue cryptocurrencies including China, Singapore, Ecuador, Russia, Japan and Sweden.

 

“Every major central bank is currently taking a deep look. We feel that’s our obligation, technology has now made that possible. I think it’s very much incumbent on us and other central banks to understand the costs and benefits and tradeoffs associated with a possible digital currency.” ~ Jerome Powell, US Federal Reserve Chair

 

The Future Value of Crypto

The future value prediction of Bitcoin can go to the moon or crash to the ground depending on whom you’re asking. Some analysts predict Bitcoin will go higher to $50k or $250k+ while others predict that Bitcoin will go to $0.

Here are the top 5 factors that will further influence the price of Bitcoin and cryptocurrency.

Positive

  • Increased support, directly or indirectly, by countries and central banks, and government regulation.
  • Increased institutional purchase of cryptocurrency.
  • Supply shortage with an increase in demand while new coin output remains stable (or even reduced).
  • FOMO (Fear Of Missing Out) by investors driving up prices.
  • Positive media coverage affecting perception and acceptance of cryptocurrency.

Negative

  • A major digital asset exchange failure or hack affecting confidence and value.
  • A significant fast downturn or retracement of value reminding investors of previous flash crashes.
  • Further loss of confidence or value in fiat currencies causing investors to switch to cryptocurrency.
  • Manipulation of prices by major crypto holders aka whales to move prices or dispose of at certain values.
  • Negative tax treatment on cryptocurrency (currently Malaysia and a number of countries have no capital gains tax on crypto).

 

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