Soon after the crypto bubble burst in 2018, Bitcoin prices nosedived, and the currency came back to its pre-2017 levels rapidly. The crypto winter drove away many investors and speculators from the market, leaving only the toughest hands in the industry. In 2019, the currency finally started taking a turn for good, albeit slowly. This year, Bitcoin’s upward trajectory is bringing hope for crypto investors. Its prices have increased from $7,203.94 on January 1 to $10,283.21 on February 13, marking a 35% rise. On February 14, 2019, the price of 1 BTC was just $3619.20. This shows a steady upward growth momentum in the coin.
What makes Bitcoin tick?
As the poster boy of the crypto revolution, Bitcoin is accepted in almost all crypto exchanges and crypto ATMs around the world. Bitcoin is still viewed as a ‘safe haven’ asset like gold because of which we experienced a significant uptick in prices after the US’ scuffle with China and Iran. It presents hedging opportunities too. Two crucial factors contributing to its growth are- entry of institutional investors and the formation of new Bitcoin derivatives. Fidelity Investments, Bakkt, and even Coinbase are making an institutional entry in crypto easier. On the other hand, several exchanges are introducing new Bitcoin-based derivatives, which will further standardize the market.
Upcoming reward halving
The Bitcoin network is awaiting an important event in May this year when the block rewards for miners will be slashed by 50%. This planned update to the network will reduce miners’ rewards from 12.5 BTC to 6.25 BTC per mined block. The retail sector has now started accumulating Bitcoin. Hence, the number of wallets holding at least 1 BTC has increased dramatically. This increase could push the price of Bitcoin up, at least in the short run. Overall, volatility is expected to rise in the Bitcoin market, which could raise prices in the near-term. Greater changes in the network and the industry at large could help drive prices up in the long run.
