bitcoin
Blockchain

Demand for Bitcoin Explodes

During Bitcoin’s historic price run, the cryptocurrency’s value broke the $20,000 barrier for the first time. However, it was only in November 2017 when Bitcoin passed $10,000 for the first time, before exploding over the course of the next 20 days and nearly doubling in total.

This type of volatility has always underpinned Bitcoin’s price movements, with the first half of 2018 also seeing the value plummet by more than half. However, the cryptocurrency’s most recent surge has been a little steadier and more sustainable, with demand having grown exponentially since the election of Joe Biden as US President.

We’ll explore this below, while asking whether the most recent Bitcoin price hike can be maintained over time?

The Rise and Rise of Bitcoin – What do we Know so Far?

Despite a lull during the month of September (which is something that has characterised Bitcoin’s progress throughout history),  this trail-blazing currency has enjoyed accelerated growth in the build-up of the US election.

The Bitcoin price broke the $16,000 barrier during this time, while the subsequent election of Joe Biden caused a further hike in value to $18.605. 

Make no mistake; this trend is unlikely to change in the near-term, creating a scenario where Bitcoin could achieve a record price high at some points prior to the end of 2020.

Now, many experts have asserted that Bitcoin’s price cycle is impacted by halving, which occurs every four years on average and actively reduces the supply of tokens coming into circulation.

With a third halving expected in 2021, history tells us that the price may also go on a sustained bull run in the next 18 months or so, with the value likely to rise by as much as 20-times during this period.

If this event did occur, Bitcoin could be worth a staggering $327,029 (£277,880) by the end of the period, with this growth being further underpinned by dynamic demand and the finite nature of the cryptocurrency’s supply.

The Impact of the Election and the Long-term Outlook

The growth of mainstream demand for Bitcoin has been borne out in the wake of the US election, which has highlighted the core benefits of cryptocurrency and the decision of global banks to accelerate their transitions to digital payment infrastructures.

Aside from Bitcoin’s finite supply, we’ve also seen how the cryptocurrency remains more impervious to macroeconomic factors than fiat currencies and other traditional assets.

It’s because of this that Bitcoin has emerged as a potential safe-haven asset in the current economic climate, and one that has largely mirrored the performance of gold and major stocks across the globe throughout 2020.

This is extremely attractive during elections and times of economic tumult, while the trend for uncertainty is sure to continue throughout the formative parts of 2021 at least.

According to Edward Moya from Oanda, Bitcoin was expected to encounter some resistance at the $16,000 mark, and while there was some truth to this, it has broken through and beyond to achieve its current value.

Unlike during previous bull runs, there’s no immediate signs that Bitcoin is set to shelve value in the coming months, while the rise in mainstream demand and a decline in circulation is likely to drive further hikes well into 2021.