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5 Reasons Why Bitcoin Might Reach $20k This Year

Bitcoin

August 19, 2020 | 

864 Views | 

JOHN K MWANIKI | 

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Volatility is one of the leading crypto features. Several factors affect the rise and fall of a coin's value; for Bitcoin, it's mostly due to demand. For now, it seems the coin will reach the highs of $20k due to the high demand. 

Here are the five main reasons Bitcoin will hit $20k.

1.    Bitcoin Halving 

Bitcoin halving is one of the most anticipated Bitcoin events. It is where the miners' rewards reduce by half for every transaction. The reduction has a ripple effect on the coin as it reduces supply. 

Bitcoin understands the laws of demand and supply. The lesser Bitcoin available with a similar demand, the higher the value increases. 

The last Bitcoin halving happened in May 2020. However, it takes time to realize the full impact of the event. It can be as long as throughout the year. For now, Bitcoin is already on an upward trajectory. The additional boost from the halving will likely raise it even higher. 

Already several experts have predicted a positive impact of the halving on the coin. Most of them are drawing relations from the earlier halving events. The first Bitcoin halving happened in 2012. It raised the value of the currency from $12 to $1150.

The next followed in 2016, which came with an increase from $650 to nearly $20k. The 2020 one is likely to follow suit. 

The only concern that comes with halving is that the value tends to decline after a while.  Still, it never falls past the previous state. For example, in 2016 Bitcoin reduced to around $3200. This is still way above the last value before the halving. It means the rise of value through the halving is permanent. 

2.    The surge of Central Bank Cryptos

The uptake of cryptos by governments had been low for some time. Most of the governments felt the crypto was a financial coup. 

Countries like India and China had banned the coins. However, status is first changing. India, through the Supreme court, has allowed the currency to operate. China, on the other hand, is one of the leading crypto using countries today. 

Several countries are looking at the possibility of a central bank-backed cryptocurrency (CBDC). Lithuania has already launched a national cryptocurrency. 

Several other countries are following the trend. China is already at the advanced stages of the coin. The same applies to Japan, the USA and the European Union. Also, different countries are willing to collaborate to come up with a superior coin. 

Most traders believe CBDC is a threat to Bitcoin. However, it is more beneficial. Banks releasing CBDC is a show of confidence on cryptocurrencies. As the leading crypto, anything that benefits crypto raises Bitcoin price.

With most central banks likely to introduce their crypto coins soon enough, the value of Bitcoin will receive a boost. The demand for the currency as a form of exchange must rise. 

3.    Adoption by Traditional Financial Institutions 

The traditional banking system has had similar problems with Bitcoin, like those of the government. The institutions have been sceptical about the whole idea of the new currency. Understandably, as the custodian of money, they won't let their clients make rush investment decisions. 

The relationship between the banks and the Bitcoin has been complicated. In the beginning, most of the investment firms welcomed Bitcoin. They believed it was a sound asset. However, it all changed due to the volatility of the coin. It then turned frosty with banks invalidating Bitcoin and other cryptos as assets. 

The industry, though now seems ready to embrace Bitcoin. Most of the top banking facilities have already included Bitcoin exchanges in their portfolio. They are also working with other Bitcoin processors. Investment firms like JP Morgan have all embraced the coin. 

Once such institutions accept the coin, they allow their clients to trade in the currency. As the coin attracts more demand, it becomes more valuable. 

4.    Coronavirus Effects 

Any other time would have sounded ironical stating Corona as an improving factor to Bitcoin. The effects of the pandemic are massive on various economies. It has grounded most of the larger sectors, with people now relying on the government stimulus package. It is a whole different case for Bitcoin. 

The coin has been gaining value steadily over the coronavirus period. This rise has made a hit among most of the traders. It is a confirmation that the currency is a safe haven for investors. It can work the same as gold. It is, for now, the best investment option for anyone looking for positive returns. 

The other reason for the rise is the migration to online facilities. The coronavirus has led to lockdowns never experienced before. Most people have embraced the digital world. Whether working, shopping, or entertainment, online has been the fix. The digital platforms require compatible digital coins. That is where Bitcoin has gained even more. 

Bitcoin takes pride as a digital coin. It comes with secure and speedy transactions. The more the digital world keeps growing, the more the uptake of Bitcoin. The uptake will rise such that it will reach $20k in 2020. 

5.    Experts Projection

The Bitcoin analysts are the other useful entity in the crypto. Most of the traders rely on predictions when making investment decisions. In most cases, they turn outright. For now, most of them have billed Bitcoin to hit the $20k mark in 2020. 

One of the most notable prediction is from Bloomberg. The Bloomberg analysts have arrived at the figures using previous Bitcoin patterns. It also believes there are several positive underpinnings for the growth of the Bitcoin. They think it will only take something to go incredibly wrong for the coin not to hit $20k. 

Several other reliable speculators share in Bloomberg's analysis. 

Bottom Line 

The speculations on the future of Bitcoin is ever high. The current events of the coin make it even more intense. All the indicators show the coin will hit $20k this year. The Bitcoin halving is one of such events. The adoption for mainstream use will also help the currency hit the $20k.

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COMMENTS (1)

batholomew brown  batholomew brown . I’m a bitcoin trader and the time I’m writing this blog I can’t find a single review about many bitcoin trading signal services and companies. I have lost lots of money testing them for over an year. I don’t want you to be scammed too.   1 year ago from Canada

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