The past 12 months have been breathtaking for anyone who has invested in bitcoin or even just focused on it. As early as the beginning of March 2020, when the United States first began to respond to the epidemic, the price of bitcoin was less than $4000, and now it has risen to a high of $61000, up nearly 12 times. A year ago, if someone predicted that the price of bitcoin would reach $30000 in 2021, someone would criticize this prediction as too extreme. But now, looking back, is it the forecasters who are too extreme or others who are too conservative?

Some people accept the development of bitcoin, such as musk, but there are also some conservatives, such as Bill Gates and Warren Buffett.

But in any case, bitcoin has attracted the attention of investors and industry. Citigroup pointed out in a report that many institutional investors have included bitcoin in their portfolios in recent years. Tesla, MasterCard and other companies have also accepted bitcoin. It can be said that bitcoin is at the "critical point" and may become the preferred currency for international trade in the future. We can also consider the price trend of bitcoin in the next stage from the following aspects.

1. More accepted by the mainstream

In the use of bitcoin in daily life, there has always been a problem of chicken or egg: few people use or accept bitcoin. But in 2020, bitcoin's adaptability has changed dramatically. From square's $50 million investment in bitcoin to PayPal, which allows users to buy and sell bitcoin, well-known financial technology companies have recognized bitcoin.

In 2021, we may see more mainstream acceptance of bitcoin. At least one major bank in the US or Europe will announce some kind of bitcoin purchase system or agree to hold bitcoin for its customers.

2. The speculative nature of cryptocurrency

Since March last year, the price of bitcoin has soared through 10000, 20000, 30000 and so on, attracting the attention of the public and attracting many people to "speculate". Many investors buy bitcoin out of "fear of missing the market"; others regard bitcoin as "fashion" and regard it as a collection.

Compared with 2017, more institutional investors now put bitcoin into their portfolios. However, bitcoin is still more speculative than most of the underlying companies.

3. Decentralization of blockchain

Blockchain is the technology behind bitcoin and has the characteristics of decentralization. Recently, the Federal Reserve of the United States has suspended telegraphic transfer and check clearing services on a large scale. Bitcoin supporters believe that blockchain can avoid that kind of interruption; bitcoin deniers also believe that blockchain has wide application potential.

In addition, if there is turmoil in the financial and political systems, people will see bitcoin as a "safe haven" to make it more widely used.

4. Bitcoin production halved

On May 12, 2020, with the 630000 blocks excavated, bitcoin ushered in the third half. Historical data show that bitcoin halving will inevitably lead to a rise in the price of bitcoin. Judging from the market after the previous two halving, there may be a bull market one year after the third halving.

In addition, during the 2020 COVID-19, bitcoin prices followed the trend of traditional financial assets such as US stocks and gold, which may continue this trend in the future. While US stocks and gold have been on the rise from the 50 year historical data, this means that bitcoin prices will continue to rise.

Former BTCC co-founder and CEO Bob Lee said bitcoin could soar as high as $300000 in the current bull market based on its historical model. Li Qiyuan said: "bitcoin bull market cycle is once every four years, this round is a big bull market. I think the price could rise to more than $100000 this summer. " Bitcoin has had two "super bull cycles" in the past eight years, he said. The last one was in 2017, when the price of bitcoin rose tenfold, from $1000 at the beginning of the year to nearly $20000 at the end of the year. In the current cycle, the price of bitcoin has reached about $30000 at the beginning of 2021. Li Qiyuan said that if it rises 10 times as much as in 2017, it means that the price of bitcoin will reach $300000.

Bitcoin is the best performing asset in the past decade, and its performance in 2020 is better than that of standard & Poor's, Dow Jones, NASDAQ and other U.S. stock indexes and gold futures! Because the price of bitcoin fluctuates greatly, it is not a recommended investment for anyone, but I think it is an interesting topic for radical investors to invest in bitcoin.

(2021-3-27)