"This is inevitable" – Elon Musk
As absurd as it may sound, bitcoin (BTC) has become one of the most trending subjects at the beginning of 2021 itself. The cryptocurrency which was invented by an unknown person or a group of people who goes by the name Satoshi Nakamoto in 2008 has now become the talk of the town. And for its rise in enormous recent popularities, we can thank the GameStop and the Wall Street saga. Because of that event, the cryptocurrency which was more a topic of discussion amongst the minuscule has now grabbed the attention of more casual seekers.
What’s more fascinating is that several reports have estimated that Bitcoin Will Hit $50,000 in 2021 itself. And here we will be discussing reasons why it is going to happen.
1. Mining Bitcoin isn’t Cheap
Earlier, the mining of BTC used to be easy and cheap but with the influx of miners in recent times, the difficulty of mining BTC rate has gone upwards alongside decreasing the reward from it as well. So much so that, now for a lone operator it is virtually impossible to mine even a single BTC without help both in terms of expensive mining resources and vast quantity. Also, a lone operator cannot mine a BTC without the aid of a mining pool.
Although the mining pool can be operational with cheap electricity, still it will cost something. Besides, running a mining operation can be too much for a lone operator to handle in terms of the overall cost. So, mining BTC undeniably requires money and that gives it an intrinsic value lay.
2. Supply is Limited
A prime misconception about cryptocurrencies is that people who don’t have much knowledge about them may think their supply is unlimited. BTC’s case is no different. The value of BTC is largely driven by its supply and somehow the supply rate has been trending downwards. So far, the total BTC’s ever minted is around 21 million.
However, this number is exclusive of the wrapped BTC as well as the others kind of defied source BTC’s, and ultimately, this will also play an important part in affecting the price of BTC.
3. BTC Addresses are Growing in Numbers
With the way, how the setup of the BTC network is, it can be said to have an infinite number of addresses already. This contributes towards its safety enormously, as hackers will have gargantuan time to hack it due to the requirement of a specific address.
Here, an important figure is the number of BTC wallets that are holding BTC >0 currently. In the year, the same figure updated a YOY increase, reflecting the total number of wallets at over 1 million users. While this may not sound like much but it must be remembered that the supply of the BTC is limited.
4. The Growing BTC Mining Community
You don’t see a community growing unless it has potentially something worth for people to invest in it. Bitcoin (BTC) is no different than those communities. And if the latest data reports are to believed, it only reflects BTC mining indeed is an attractive and lucrative investment.
In fact, with the recent events, the amount of computing power (also known as hashing power) that has been attributed to the BTC network is currently at an all time high. With this outcome, it is safe to say that Bitcoin’s computing power will most likely continue to set new highs in the future for long.
5. The World’s Reserved Cryptocurrency
Thanks to its ease of usability and availability, Bitcoin for long has remained and continues to be the World’s reserved cryptocurrency. When it comes to cryptocurrency, BTC remains the first choice of most new users. This is a testament to the dominance of the BTC in the cryptocurrency market cap.
If you take out 2017 and 2018 when the Altcoin craze was at its high, it is worth noticing that besides those two years, Bitcoin has always commanded half of the total market at the least. This shows that as the world is warming to cryptocurrency, BTC is going to be the first choice for most of the users.
6. Getting Lost, Locked, Burned Everybody
If the limited numbers and the decreasing supply rate of Bitcoin weren’t enough to amplify the BTC movement, we have lost BTCs to consider. It is estimated that about 3.7 million BTCs have already been lost and irrecoverable. Approximately, every day 1,500 BTCs get lost. What this means is that nobody can get to it because of the blockchain where its operation requires you to lock or “burn” coins in purpose to attain new values from it.
7. Growing Defi
Defi is decentralized finance that locks BTC and other cryptocurrencies into a smart contract. And the value of the Defi recently has grown at an exponential pace to hit a worth of over $27 billion in value. Now, this makes it clear that part of its growth has a lot to do with BTC which is the first choice for many when it comes to cryptocurrency.
These reasons combined with the latest reports undeniably explain why Bitcoin will hit $50,000 in 2021 or fact, even more.
We, at OpenGrowth, are committed to keeping you updated with the best content on the latest trendy topics from any major field. Also, both your feedback and suggestions are valuable to us. So, do share them in the comment section below.