Written by Norman Isaac Mwambazi

Bitcoin price top $50,000 for the first time in four weeks, closing in on crossing a trillion dollars in market value

Those who bought the dip when the world’s most valuable cryptocurrency, bitcoin, dropped about three months ago to $42,000, must …

Those who bought the dip when the world’s most valuable cryptocurrency, bitcoin, dropped about three months ago to $42,000, must be smiling now because the digital asset has now surpassed $50,000 in price. Bitcoin closed yesterday’s trading session above $50,000, the first time it has crossed that mark in almost four weeks.

In the past, there have been several predictions about Bitcoin’s price appreciation. Fans of the cryptocurrency project bitcoin to soar above $150,000 in three years; others project it to hit $14 million in 10 years. In February this year, SkyBridge Capital’s Anthony Scaramucci predicted that Bitcoin could “easily trade” at $100,000 per coin in the next 12 months, and it seemed to be headed towards achieving that milestone when it peaked at $62,624.50 in April before falling miserably to half that price in May. SkyBridge, which provides a conduit for the mass affluent and Registered Investment Advisors (RIAs), launched its Bitcoin Fund L.P in January this year to invest in the hard-to-reach asset class of hedge funds. We are left with a few months to see whether Scaramucci’s prediction will come to pass.

There have been no special events you can assign the bitcoin surge to in the past few days. Still, CoinShares, a digital asset investment company, said early this week that the past seven weeks had seen an increase in the number of investors putting their money in cryptocurrencies. This is attributed to the fact that investors are getting more confident in putting their money in the crypto space, however volatile it may be, despite the criticism it gets from opponents.

In the past seven days, Bitcoin has soared almost 20%. This rally has been spread all over the crypto market with other cryptocurrencies like Ethereum, dogecoin, Binance, and Solana, all moving upwards in the same period.

The Chief Operating Officer (COO) and co-founder of Bitcoin IRA, Chris Kline, pointed at recent macro concerns as having boosted the cryptocurrencies, particularly bitcoin. One of these macro concerns is inflation, which has worked against stocks in recent weeks, so investors are looking at bitcoin as an alternative store of value.

Kline thinks inflation is “going not away anytime soon.” Bitcoin IRA is the world’s first and largest cryptocurrency IRA platform.

It should be remembered that the bitcoin surge is only coming back after months of struggling since late April up to around August when it started looking like it was steadily rising. All this has been amidst a crackdown in China against bitcoin miners, its final banning in China, and things like Elon Musk talking widely against it, citing the effects its mining has on the environment. Elon’s words led his Tesla company to drop it as a mode of payment for Tesla cars. 

There have been concerns that the U.S. will follow in China’s footsteps and apply strict regulations to bitcoin and the entire crypto market. Still, crypto enthusiasts were delighted when Federal Reserve Bank Chairman Jerome Powell said that the central bank has no plans to introduce tough regulations for the bitcoin trade and mining like China did.

Mainstreaming and the institutional investor factor

Although bitcoin has been consistently rising in value since its inception in 2009, there has been hesitation among institutional investors and big companies to trust the digital asset, citing the decentralised nature of the blockchain technology on which it is built and its volatility, among other things.

However, this has changed in the recent few years, with big companies buying bitcoin and including it on their balance sheets or accepting it as a mode of payment for their goods and services. Companies like MicroStrategy Inc. (ticker: MSTR), Microsoft Corp. (ticker: MSFT), PayPal Holdings Inc. (ticker: PYPL), Tesla Inc. (ticker: TSLA), Coinbase Global Inc. (ticker: COIN), AMC Entertainment (ticker: AMC) among many others all either accept bitcoin or have bought big amounts of it, in addition to other cryptocurrencies like Ethereum and dogecoin. The fact that these big institutional investors are increasingly adding bitcoin to their balance sheets has positively changed the sentiment about owning bitcoin. It is cited as the reason behind bitcoin’s road to becoming a mainstream currency.

Yesterday, Tuesday, October 5, 2021, AvaTrade Chief Market Analyst said that some top firms could be waiting for the bitcoin price to drop a little more so they can buy “cheaply” and bet on getting significant returns when it appreciates. With the way analysts predict bitcoin price to behave in the coming few years, these top firms could miss out on getting the digital asset cheap if they keep waiting. AvaTrade’s platform allows users to trade forex, stocks, crypto, and other assets online.

Scepticism

There is still a lot of scepticism around not just bitcoin but the entire cryptocurrency phenomenon. Many people still don’t trust the fact that one can own “money” that they can literally never physically touch. One of bitcoin’s most vocal critics is Jamie Dimon, the Chief Executive Officer (CEO) of American investment and financial services firm JPMorgan Chase (ticker: JPM). During Axios Show on HBO, Dimon labelled bitcoin as a “fool’s gold”, claiming that it has no intrinsic value and that regulators will rigorously regulate it. Bitcoin currently has a market capitalisation of 

Dimon said the cryptocurrency, which now has a market value of about $950 billion, is “a little bit of fool’s gold,” adding that “it’s got no intrinsic value. And regulators are going to regulate the hell out of it.”

Bitcoin rally

Bitcoin is closing in on making a trillion dollars in market value, currently at $985 billion, and market data from Yahoo Finance shows that it is trading at $54,282.79 for each coin. This data shows that the world’s largest cryptocurrency has soared as high as 8.90% since markets opened today, Wednesday, October 6, 2021. The global crypto market is valued at $2.22 trillion and growing. 

PS: Bitcoin prices are quoted in real-time, and they are subject to change anytime.