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After hitting an all-time high, Bitcoin is now eyeing the big price of $100,000. The Coin that introduced us to the era of cryptocurrencies continues to break records year after year. Despite all the challenges on its path, bitcoin continues to shine.
The key question now is how far can it get and by when? Most analysts believe the price of bitcoin is currently undervalued and could get as high as $1 million in the long term.
What is Bitcoin?
Bitcoins is a peer-to-peer cryptocurrency. It is the pioneer cryptocurrency that was launched in the year 2009 by the now-famous Satoshi Nakamoto. As the leading cryptocurrency both in value and popularity, it has a market value exceeding $1 trillion.
Bitcoins are created through the mining process as a reward when miners meet the requirements of a set algorithm.
It has a supply cap of 21 million coins of which 19 million are already in existence. This means there are only about 2 million more coins to mine. Currently,its price averages $63,000.
Below are some of the factors that will be key in pushing the price of Bitcoin to $100,000.
Increasing Inflation levels
Most investors are investing in bitcoin as a way to hedge against inflation. This is because inflation has been rising in recent months after a year of increased fiat supply.
It is considered a deflationary coin as its supply is fixed. This has made it a direct competitor to other financial assets such as gold.
The more inflation levels rise, the more investors put money in Bitcoin. When you combine this with other advantages such as decentralization and privacy, It is attracting increasing investments assisting drive its price.
The higher the inflation levels rise, the higher the price of bitcoin is likely to get making it possible to hit the $100, 000 value.
As mentioned earlier, It has a supply cap of 21 million coins only. Supply is an element of price hence as long it is low, any increase in demand will cause a price rise. Because cryptocurrencies operate in a free market, the increasing demand will continue to push its price higher.
In a world with over 7 billion people, it is clear 21 million coins will never be enough. Hence, the price of the coin will keep rising as long as demand continues.
Big institution investors are also starting to focus on cryptocurrencies with bitcoin being the leading choice. Some of the leading companies and hedge funds have already put their money in or are planning to.
This is one of the reasons the price is rising. As more investors come on board, it is likely the price will rise to the $100,000 level and beyond.
Recently, we have seen some countries such as El Salvador legalizing use and investment in Bitcoin. This is a major shift from the earlier resistance by the governments in embracing Bitcoin.
I believe most nations are watching how this will progress before they can also act. If successful, it is likely more nations will join El Salvador in accepting bitcoin and other cryptocurrencies.
Recently, the US government approved the first bitcoin ETF (Exchange Traded Fund) and is in the process of approving others. This is yet another indicator the regulators are embracing Bitcoin and cryptocurrencies.
Regulator approval is a huge boost for it and will assist grow its price.
These regulator and market actions are key in pushing its priceto and beyond the $100,000 mark. Hopefully, this could happen by December this year.