Eventually, Bitcoin becomes the most popular cryptocurrency and first preference of traders in the past five years. The acceptance rate is getting better, and there are chances that more people will be investing in it. When bitcoin released in early 2009, the value and demand for Bitcoin were negligible. But circumstances tilted in these 12 years, and Bitcoin saved a little space in this world.
Bitcoin value in the early days of 2021 was 29,000 USD, and it increased to 33,000 USD after one month. The increase in demand is the primary reason behind such high prices of Bitcoin. It was a 4,000 USD increase but is it phenomenal? Well, you can say that, but the increase in value during February is way more thrilling. The value kept increasing and reached 57,489 USD on Feb 21, 2021.
In just twenty days, the value increased is 24,000 USD. The numbers are thrilling, and if someone has invested in the first week of February, he/she earned a great profit. But then the value crashed, and it went down to 45,000 USD and started recovering again. The fall of the price of Bitcoin to 45,000 is for the first time in the last 15 days.
Now, the price is recovering, and right after ten days, the value of bitcoin at Bitcoin News Trader APP is around 49,000 USD. According to experts, the price will rise again, and there are fewer chances of facing any fall in the upcoming days. So, the question that still arrives in mind is about the fall. How did this fall happen? Let’s understand from the perspective of an expert economist.
Earlier Institutional Investors
The demand is playing a vital role in the value of a cryptocurrency. As the earlier investor institution of bitcoin, MicroStrategy, wanted to invest $2.17 B into the Bitcoin, there were chances of fall. Reserving 90,513 Bitcoin under their name is quite phenomenal. This number of Bitcoins under one institution also affects the control over cryptocurrency.
The expert from Coindesk (Crypto Exchange portal) claims that a mild pullback of 50,000 USD is acceptable. But, if there is a harsh pulling and taking the second leg of investment, the price might fall to ugly numbers like 30,000 USD. This decrease in value can take time to rise, and it will affect most of the investors. This fall in price caused major chaos that investors were not sure whether to pull back their money or not.
Short of Demand
As the price was dropping, many investors started selling Bitcoin so that they don’t fall to an ugly number. The chain continued, and it reduced the demand. There were a greater number of Bitcoins for sale than the number of buyers. The shortage of demand is a major reason behind the fall in price. The same rule applies in any kind of cryptocurrency, share, and stock market.
This utter confusion is hard to remove, but now the Bitcoin is rising, the demand is getting high. The recovery is slow, and an expert says that Bitcoin might not reach the same high in the upcoming two months. There will be a slow and steady recovery. But, it will hit 60,000 USD at the end of April. There are many chances that the value might increase to way higher numbers unless there are no crisis or pandemic situations.
The Number of Competing Cryptocurrencies
A huge number of competing cryptocurrencies are making their way to the top 10 digital currencies. Dogecoin might be new, but it is getting prominent exposure from people like Elon Musk, Marques Brownlee, and other famous personalities. Elon Musk, CEO of Tesla, is one of the famous businessmen and his tweets influence people.
The recent tweets about dogecoin got the attention of investors, and the demand is slightly shifting. The increase in competition is a major reason that the price has fallen, but the recovery is taking place. And if you have invested in bitcoin, then keep some patience.
Bitcoin is 49,000 USD on Mar 1, and experts claim that value is going to rise. So, it would be better to predict the future of Bitcoin based on demand and then deciding the next move as an investor.