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Bitcoin is once again in focus now that it has cracked the $20K ceiling, a move that washes away notable market resistance and opens the door to a potential 50% increase in 2021, according to one analysts we follow.
"Bitcoin is, I believe, likely to have another record-breaking year in 2021, with prices expected to rise 50% and possibly double with its current momentum," says Nigel Green, chief executive and founder of deVere Group.
The cryptocurrency on Wednesday broke through the $20K barrier for the first time ever, the previous high was in December 2017 when the Bitcoin price hit $19,850.
"It’s a major milestone for Bitcoin and I doubt that we’re at the end of the current, historic bull-run," says Green.
The price of Bitcoin rose a further +13.78% in Thursday trade, taking the crypto to 2626.6453 USD with the price in Pound Sterling rising to 16619.3693 and the price in Euros rising to 18489.9.
While Bitcoin has powered higher, Green warns of the potential for a near-term pullback.
"Inevitably, we will soon see some pullback on prices and more volatility as traders sell Bitcoin at record high prices," says Green.
However, any dips in price might be considered an opportunity for retail investors to gain exposure to the asset.
"Lower entry points can be good for smaller investors to increase their exposure to cryptocurrencies," says Green. "Indeed, it could prove to be particularly beneficial as Bitcoin is, I believe, likely to have another record-breaking year in 2021, with prices expected to rise 50% and possibly double with its current momentum."
The de Vere CEO noted that some of the world's biggest institutions – amongst them multinational payment companies and Wall Street giants – pile ever more into crypto, bringing with them their enormous expertise and capital, which in turn, swells consumer interest.
He went on to note that with governments continuing to support economies and increase spending due to the pandemic, investors are increasingly going to look to Bitcoin as a hedge against the "legitimate inflation concern."
Previously Green observed that inherent traits of cryptocurrencies are ever-more attractive.
"These characteristics include that they’re borderless, making them perfectly suited to a globalised world of commerce, trade, and people; that they are digital, making them an ideal match to the increasing digitalisation of our world; and that demographics are on the side of cryptocurrencies as younger people are more likely to embrace them than older generations," says Green.
Ayush Ansal, CEO of the hedge fund, Crimson Black Capital, says that after being in a "wasteland since the infamous bull run of late 2017, crypto, and Bitcoin in particular, are back".
Bitcoin attempted to crack the psychologically significant $20K area earlier in December but ultimately failed, leading to a pullback.
This latest successful attempt has cleared out any resistance in the market, but selling pressures will ultimately return when buyer fatigue inevitably sets in.
Nevertheless, Ansal says public interest in cryptocurrencies will be reignited over the Christmas period, as people start to believe in Bitcoin all over again.
“The Covid-19 pandemic has almost certainly contributed to the rebound in Bitcoin. It has changed the order of things and that resonates with many investors right now," says Ansal. "The resurgence of Bitcoin will once again have Central Banks on red alert."