Bitcoin, the largest cryptocurrency by market capitalization, has plunged after it seemed poised to hit $20,000.
Throughout the year, Bitcoin has faced several hurdles, including plunging serially at some point. At the same time, it also surged beyond speculators’ expectations. One BTC has traded well above $18,000 in 2020. The last time this mark was hit was in 2018. Back then, it went on to hit its all-time high of $20,000.
Crypto investors and analysts continue to await when Bitcoin revisits its all-time high price ($20,000) and surge above that level. Analysts are optimistic this will be a mere matter of time, and it won’t take too long.
Anthony Pompliano, who has always been a major bull, predicted that one BTC could potentially reach a price of around $100,000 by next year.
As at the time of writing this report, Bitcoin trades at $18,400. The crypto community still observes what level the Bitcoin price may hit by the end of the year. Until that happens, here are critical and defining moments for Bitcoin so far in 2020.
Bitcoin’s February surge
Bitcoin started 2020 at a value of nearly $6,900. At the time, the value had been rising steadily for a while. By February, Bitcoin was trading above $10,000.
The price was said to be on a steady surge owing to several reasons. Analysts hint at it being a response to the US and Iran brawl at that time. It lead Iran to blow up US military base in the Asian country. Political tension always seems to drive investors to safe-haven assets, including gold and Bitcoin.
On the other hand, some analysts said the increase was a result of whale manipulation. Since Bitcoin’s price was in the mid-$9,000 range, Joe007 has consistently said that the rally is manipulated by fake buy walls and spoof orders. In his opinion, this surge was triggered by other whales placing spoof orders across margin trading platforms to inorganically pump the price of Bitcoin up.
However, the February surge was a critical moment for Bitcoin in 2020, being the first major price shift to be experienced this year.
March serial plunge to $4,000
Bitcoin’s tragic plunge in March was a real test of investors’ faith. Dropping from over $10,000 to a low of $3,400 took a lot of people by surprise. Weak hands sold, whereas everyone else tried to hold down the line.
The plunge was basically a response to the ravaging coronavirus which was declared a global pandemic by the World Health Organization. Bitcoin eventually recovered and returned to about $7,000. From then on, it consolidated and continued its upward surge with increasing volatility.
The Bitcoin May Halving
The halving always remains a critical time and event that is believed to have a real-time effect on Bitcoin price.
Bitcoin’s current price appreciation to $19,000 and beyond are attributed to the May 11 halving. “It may take six to 12 months for investors to reap the rewards of post-halving price movements,” said Lennard Neo, head of research at Stack Funds.
The halving cut reward for miners to 6.25 BTC per block, rather than the 12.5 BTC they acquired before the halving. Slowing the emission down makes it even more scarce than before
Square, MicroStrategy Bitcoin Investments
Throughout 2020, the Bitcoin industry welcomed a new set of institutional investors. Square, MicroStrategy, and others invested some of their company funds in BTC. The list of Bitcoin Treasuries has grown steadily ever since.
Square’s investment in Bitcoin was anticipated as Dorsey – CEO of Square and Twitter – has always been known to be a crypto enthusiast. Square invested $50 million, 1 percent of the firm’s total assets.
Micro Strategy, between August and September, invested $425 million in Bitcoin. Since these investments, MicroStrategy and Square have made significant profits of 46% and 53%, with each company’s Treasury now worth $620 million and $76 million respectively.
MicroStrategy CEO Michael Saylor has been praising Bitcoin publicly. While may thought he was jesting at first, Saylor seems genuinely pleased with the cryptocurrency at this stage.
PayPal Supports Bitcoin
PayPal’s announcement that it now provides crypto services is one of the biggest developments across the industry this year.
The payment giant announced it was launching crypto services in October 2020. American users began to transact crypto on November 12th. Since then, PayPal users are said to be buying the majority of the freshly mined Bitcoin supply on the market each day, alongside Square users.
Hedge Fund Pantera Capital estimates that Square clients have accumulated 40 percent of “new” Bitcoins entering the market. This has been the case since the service launched two years ago. Moreover, PayPal may be responsible for even more demand since launching just a few weeks ago.
Pantera estimates that within three weeks, PayPal clients were already buying roughly 70% of the new supply of BTC.
“It’s having a significant increase on price,” said Dan Morehead, founder, and chief investment officer of Pantera Capital.
The moment Bitcoin hit $19,000
The moment Bitcoin hit $19,000, analysts expected the price was set to hit $20,000.
However, the price crumbled, disappointing several investors. Bitcoin fell below $17,000 and as at press time hovers around $18,400. Analysts still predict that BTC would hit the $20,000 mark and surpass the level very soon.