Bitcoin price is predicted to increase in 2021. Curious, what are the reasons?
Bitcoin is the most popular crypto asset in the world, including in Indonesia. Throughout 2020, the increase in crypto assets increased by around 170%.
In detail, at the beginning of the year, the Bitcoin price was still Rp. 99 million. Then it increased to around IDR 270 million at the end of 2020. The king of cryptocurrency has proven to be a safe haven asset during the COVID-19 pandemic.
In addition, Bitcoin has also been recognized as an asset that has an inflation hedge. That is, the increase in the price of Bitcoin is higher than the increase in the price of goods. It is recognized by large conglomerates and corporations in the United States and other countries. Thus, the price of Bitcoin increases as the demand for crypto assets increases.
In 2021, the Bitcoin price is predicted to continue the positive trend. Here are a number of factors that will influence the Bitcoin price next year.
1. Miners will find it difficult to get Bitcoin
Bitcoin is mined digitally. Until the end of 2020, Bitcoin mined had reached 18 million of the total Bitcoin 21 million.
Bitcoin is experiencing a halving day or a reduction in half of its supply in 2021. This means that the supply reduction at the level of miners or miners is running low. The impact of this halving day will only be felt for the next one year. So, the price of Bitcoin will increase in 2021 because the supply is limited, while the demand continues to increase so that the price of bitcoin will have the potential to increase.
2. Annual Cycle
The reason why Bitcoin price will increase in 2021 is also because of the annual cycle. Halving days occur in leap years, starting in 2012.
Usually, one year after the halving day the Bitcoin price will increase. This has happened, namely in 2013 and 2017. The reason is because the impact of the halving day will only be felt for the next one year. In the third halving, which is this year, Bitcoin will be projected to increase in 2021 if we look at the history of the first and second halving.
3. Massive Purchases from Conglomerates and Large Companies
Recently, the company MicroStrategy Inc. announced buying Bitcoin worth trillions of Rupiah. Previously, financial companies such as PayPal and Square also provided Bitcoin payment features.
Because of this, the use of Bitcoin is maintained. More often than not, people transact using Bitcoin. Thus, the impact will be on the increase in the price of Bitcoin in 2021.
4. People’s Understanding of Bitcoin Increased
Bitcoin makes a good inflation hedge. Paul Tudor Jones, a conglomerate from the United States was the first to announce it in the media. Apart from that, other companies also admit it. They become an example for people who want to secure their assets. People prefer to buy Bitcoin. Apart from that, people also realized that Bitcoin was a safe haven asset during the Pandemic.
5. Government Regulation
Bitcoin is a decentralized asset that is not affected by government policies. This is different from stocks, deposits and forex. However, government policies have an indirect impact. Government policies of course encourage demand for Bitcoin. However, several developed countries have issued policies that are friendlier to the cryptocurrency and blockchain ecosystem. This could happen because of the increasing understanding of Bitcoin and the increasing number of transactions.
So, even though by the end of the year the Bitcoin price was almost at its highest, 2021 is an even better year because the price will go up. It’s never too late to trade Bitcoin!