Bitcoin will rise by almost 50% in 2021. The world’s most popular cryptocurrency lost ground to other rivals like Ethereum, Cardano, and XRP in terms of price gains. The year that Bitcoin’s network activity saw its highest level of activity in its history was however, It reached the highest ever recorded level in terms of total BTC addresses, mining revenue, trading volumes, and institutional accumulation.
Short-term traders may prefer price jumps to other indicators, but long-term investors favor solid fundamental growth for a digital asset. This is the case with Bitcoin at the moment. Bitcoin reached an all-time high in April 2021 at $64,000, but the price of BTC suffered a significant correction over the months that followed. Why is Bitcoin’s network growing stronger despite negative sentiment surrounding the most valuable digital asset in the world? It has many reasons.
First, Bitcoin was purchased by large corporations worldwide in 2021. This includes companies with over $100 billion market cap. Square and Tesla were two of the most prominent names. BTC from Square and Tesla inspired other global companies such as Meitu to join them. This is one of Asia’s most prominent technology firms. Retail investors jumped on the crypto market with great confidence due to an increase in institutional adoption. A recent survey by Crypto.com found that there are more than 200 million cryptocurrency users worldwide.
Second, Bitcoin was able to withstand the most severe crypto mining restrictions by China in 2021. After China’s announcement of a mining ban, the Bitcoin mining rate fell by almost 50%. However, it significantly recovered in August and September. The Bitcoin address activity reached a new record high, in addition to the recent recovery of BTC’s mining rates. Over 811,000 BTC addresses have at least one Bitcoin. The supply of is now owned by 80.5% of its long-term holders, an unprecedented high.
Is it possible that Bitcoin will reach $500,000 in the near future? Analysts believe “Yes”. Although there are still uncertainties about Bitcoin’s future price, analysts believe that the largest cryptocurrency in the world could reach $500,000 within the next few years.
Finance Magnates surveyed industry experts to get their opinions on Bitcoin’s strong network activity, and the rise in institutional demand for BTC. Quantum Economics founder and CEO Mati Greenspan believes that Bitcoin is now an established asset.
There is no more FOMO about Bitcoin
“Bitcoin is now well-established as a long-term asset store and value asset in the mainstream market. At this point, the FOMO phase appears to have ended and many institutions are likely in accumulation mode. We’ve seen incredible volumes on bitcoin networks over the past month with new records being set in terms of the value transferred onto the blockchain. We have seen a record $383 billion in bitcoins transferred in one day, which is four times the amount we have ever seen. Greenspan stated that a lot of the activity comes from wallets with larger balances, also known as whales. It’s impossible to know what they might be up too.”
Greenspan commented on the future price action and volatility of bitcoin. Bitcoin’s price will be between $5,000 and $5,000,000 at the end of this year.
BTC Mining and Institutional Adoption
Institutional inflows of more than $4Bn were attracted to Bitcoin-related investments this year. CoinShares’ recent report on digital assets shows that global asset management firms hold over $35 billion in BTC assets.
Marc P. Bernegger of Crypto Finance Group’s Board of Directors commented on the recent surge in Bitcoin mining activity. He said that it was fascinating to see how miners moved from China, and that the hash rate had recovered to its previous all-time highs. This is a great stress test for all of Bitcoin and shows how decentralized and reliable the entire network has become. Institutional investors are still moving into digital assets, and we will soon hear from some well-known names announcing their participation in Bitcoin.