Would you believe that Bitcoin has been around now for over 10 years already? Initially, the general consensus was that this new digital currency would take the world by storm, and that it would uproot commercial banking as we know it today. While we might not have experienced this storm yet, over the last 10 years, Bitcoin has definitely made some waves.
A simple search online will show that many people did, in fact, invest in Bitcoin in the early days and they made millions of dollars. In addition, today, well-known companies, such as Amazon, Tesla, Gap, Bloomberg.com, to name a few, accept Bitcoin for payment. According to a study done by Cambridge University, today, there are almost 5.8million unique users who are actively using a cryptocurrency wallet, most of which are using Bitcoin. This number is far greater than the estimated 1.3million unique users back in 2013.
Quick Fact: The first Bitcoin purchase was for pizza.
At this stage, you might be wondering about the Bitcoin future. Will the price of this digital coin rise or fall, and is it a good investment over the long term? Will Bitcoin become the 21st-century version of gold and will it replace banking as we know it? If you are asking any of these questions, then you have come to the right place. Here, we will explore Bitcoin and then we will look at the things you need to consider before you make an investment. We will also take a look at the popular price predictions from big players in the markets as well as the world events that could impact the price of Bitcoin in the future.
So, let’s get started.
What Is Bitcoin?
In 2009, Bitcoin was created by an anonymous developer called “Satoshi Nakamoto.”It was the original and the first cryptocurrency. The main feature of Bitcoin was that it allowed people to transact without a third partyintermediary, such as a bank. As a result, it was recognized as a decentralized payments system.
Based on this, it is important to understand that the Bitcoin network is not controlled by a single person or authority. It is also not backed by any central bank or government. Transactions are instead verified by ‘miners.’ These miners use their computational power in order to confirm transactions and in return, they are rewarded for contributing to the network with payment in Bitcoin.
Quick Fact: Bitcoin mining consumes about as much energy as a mid-sized country.
The technology that supports Bitcoin is called a blockchain. This can be compared to a giant accounting book and every single transaction that is processed on the Bitcoin network,can be viewed on the blockchain. Interestingly, once a transaction has been added, it can never be removed or changed and this makes the transaction process secure and transparent, one of the many benefits of Bitcoin.
With a basic understanding of Bitcoin, let’s take a look at the value of this cryptocurrency since it was introduced into the financial markets over 10 years ago.
History of the Bitcoin Value
In comparison to the US dollar (USD), when Bitcoin was first released in 2009, its price was less than 1 cent.
By July 2010, one Bitcoin was valued at $0.08 and by December 2013, you could buy one Bitcoin for $1,000. By May 2017, the price reached a new high, and on the 20th of May, the price passed $2,000 for the first time.
After this date, there was nostopping Bitcoin and by the 17th of December 2017, one Bitcoin was trading at $19,783.06! By February 2019, Bitcoin had lost in value and was trading at $3,930 a coin and by May 2019, it was at $7,932.
Even if you are not an online trader, it is clearly evident that the price of Bitcoin has been on a rollercoaster ride since it’s inception. Based on this, it makes perfect sense if you are asking about the future price of Bitcoin, so let’s see what people are saying in the markets. Remember, that these are merely predictions and we will look at what you should consider before acting on someone else’s prediction.
Bitcoin Future – Price Predictions
Let’s start with some facts. The fact is, no one can predict the future price of Bitcoin. If we could, we would all be billionaires. As we have seen, the price of Bitcoin has been very volatile, which means the price moves up and down very quickly. Since there is not always an explanation as to why it moves like this, this makes the future prediction of Bitcoin prices a little more difficult. This differs to traditional trading where there are usually very specific events that occur that impact asset prices. For example, when Apple announces that the sales of their iPhone has declined, the share price is likely to drop as well.
Quick Fact: There are fewer Bitcoins than millionaires in the world.
To simplify the prediction when considering the future value of Bitcoin, it is better to look at real-world events including the future roadmap of Bitcoin, regulations of cryptocurrencies, new partnerships and improved technology. Also, take the time to do your own market research. Don’t just simply follow the hype and invest in Bitcoin simply because you read an article that told you to do so.
Remember, that at the end of the day, when it comes to the Bitcoin future, everyone has an opinion and there is no guarantee that anyone has gotten it right.
Let us look at some well-known Bitcoin predictions.
2020 Bitcoin Price Predictions
We will start with John McAfee who is the creator of the popular McAfee anti-virus software. John makes a lot of predictions on Twitter about Bitcoin. In 2017, he stated that by 2020, Bitcoin will reach $1, 000,000 and if it did not, McAfee said he would eat his private parts!When he was asked on what his prediction was based, John stated that he has a personal price prediction model, yet he did not provide additional information. To put it into perspective, if McAfee’s Bitcoin future price prediction comes true in 2020, it would give Bitcoin a total market capitalization of $15 trillion.
Quick Fact: Bitcoins are limited in number – there are only 21 million Bitcoins.
We will now move on to the Bitcoin price prediction from an analyst from Bitcoinist called OsatoAvan-Nomayo. He has based his prediction on the fact that by the year 2020, the Bitcoin mining reward will be changed from the current 12.5 BTC (Bitcoin) to 6.25 BTC. Now you might be wondering how halving the mining reward will impact the Bitcoin price. So, let us put this into perspective. The Bitcoin mining reward has been halved twice since 2009, in fact, every 4 years it is halved. In 2012, the mining reward went from 50 BTC to 25 BTC and then again in 2016, this reward was reduced from 25 BTC to 12.5 BTC. Now, if we look at the chart below, we will notice that every time the mining reward was halved, the price of Bitcoin surged higher. In 2013, one year after the first mining reward reduction, BTC rose to $1,000 for the first time. After the 2ndmining reward reduction in 2016, Bitcoin reached a record high of $19,500 by 2017. Based on this, Osato predicts that the value of Bitcoin will be above $20,000 by 2020.
As we can see from the predictions presented above, each analyst or authority has their own opinion when it comes to the Bitcoin future. With this in mind, it would make no sense to simply follow these predictions and make an investment. To be able to predict the future of Bitcoin more accurately, it would make more sense to look at real events that are likely to impact the price of this cryptocurrency. Let’s start.
Regulation
As we can see from the predictions presented above, each analyst or authority has their own opinion when it comes to the Bitcoin future. With this in mind, it would make no sense to simply follow these predictions and make an investment. To be able to predict the future of Bitcoin more accurately, it would make more sense to look at real events that are likely to impact the price of this cryptocurrency. Let’s start.
Quick Fact: The FBI has one of the world’s largest Bitcoin wallets.
In 2017, it was Japan who became the first country in the world to completely regulate Bitcoin. That is, the government classes Bitcoin in the same way it classes its own currency, the Japanese yen (JPY). As a result, today, Japan has the highest Bitcoin trading volume in the world. Citizens and institutions use Bitcoin daily and there are over 200,000 stores that accept Bitcoin.
Based on this, if other nations start to regulate Bitcoin, the digital currency will gain more legitimacy. As a result, more people will start to trust and use Bitcoin and large institutions are likely to also start investing in Bitcoin. If this happens, the Bitcoin price is likely to increase.
With that being said, the US Securities and Exchange Commission (SEC) is currently reviewing three Bitcoin exchange-traded funds (ETFs) and is looking to regulate these crypto-based funds on regulated exchanges, such as the New York Stock Exchange. With this in the headlines at the moment, the future price of Bitcoin looks very promising.
Adoption
If we do a search online, you will be quite amazed as to how many companies around the world accept Bitcoin as a form of payment. You can pay for computer products, book flights, buy household goods, and much more, using Bitcoin.
As mentioned, there are more than 200,000 stores in Japan that accept Bitcoin. As this list of companies around the world grows, it will allow people to use Bitcoin as a recognized currency. The fact is, if Bitcoin can increase its real-world usage, which it is daily, this will boost the price of this digital currency in the future.
Technical Developments
As of May 2019, Bitcoin is the number one cryptocurrency in terms of reputation, market capitalization and real-world usage. Despite this, the performance level of its transactions is quite poor in comparison to other cryptocurrencies that are cheaper, faster and more scalable.
Quick Fact: Bitcoin was sent into outer space by Genesis Mining in 2016.
To understand the difference, let us look at transaction times. It can take up to 10 minutes to confirm a transaction on the Bitcoin network, compared to the 16 seconds it takes to verify an Ethereum transaction. To top it off, Bitcoin can only confirm 7 transactions per second, while other digital coins, such as Ripple and NEO, can confirm thousands of transactions per second. Bitcoin fees are also higher than other digital coins.If Bitcoin wants to become a global payment system in the future, it will need to improve technically.
Before you panic though, this improved technology is already being worked on. A company called Lighting Labsreleased a protocol, called the Lightning Network upgrade, which created significantimprovements to the Bitcoin transaction performance. Lightning Labs even received investments from the likes of PayPal, Litecoin and Twitter. This upgrade is expected to enable the Bitcoin network to increase its maximum transaction limit to millions per second. As a result, these transactions will be cheaper and faster and according to the Lightning Labs, Bitcoin will become even more private.
With all this in mind, if the Lightning Network upgrade continues to be successful, it is likely to have a positive effect on the future price of Bitcoin.
Trading Opportunities
Initially, when Bitcoin was introduced into the markets, traders purchased Bitcoin from the exchanges. With time though, the price of Bitcoin became unaffordable and global investors started turning to Bitcoin CFDs. A CFD (contract for difference) is an agreement between two parties; the seller (the CFD provider) and the buyer (the investor). This derivative financial instrument allows a trader to invest in Bitcoin, without actually owning it and it allows the trader to speculate on the rising or falling prices of Bitcoin. As a result, aBitcoin CFD has enabled global investors to tap into Bitcoin’s benefits, without actually owning the coin. There are a wide variety of regulated and reliable brokers that offer access to Bitcoin CFD trading.
Quick Fact: In 2015, in the USA, only 802 citizen filed for taxes on Bitcoin income.
To top it off, there are many products that help to boost trading success. These include a wide range of trading robots, trading tools, trading signals and much more. A Bitcoin robot is software that will scan the financial markets in order to pinpoint potentially profitable trading opportunities. It will use its algorithm to analyze historical and existing markets conditions and it will then generate a trading signal telling a trader which asset to trade and when. Another beneficial feature is that some Bitcoin trading software are automated. What this means is that you do not even need to be in front of your computer to make a trade. Once the software finds a trading opportunity that matches the trading parameters set out by the trader, it will open a trade automatically.
With the price of Bitcoin expected to increase in the future, more people are turning to these trading robots to take advantage of the many profitable trading options in the markets.
Competition
Bitcoin was the first cryptocurrency, however, today, there are over 1,600 different digital coins available in the market. The fact is, there is no way to know which cryptocurrency will dominate in the future, so it is vital to always stay on top of the different cryptocurrencies and what projects they are carrying out. It is also important to take into account that some governments are releasing their own digital currencies, which may come into direct competition with Bitcoin. For example, in Venezuela, the government recently released their own digital coin, the Petro.
Quick Fact: In November 2016, the 4000th Bitcoin was donated to Wikileaks.
Despite this, Bitcoin will always be the first cryptocurrency and as a result, it is likely to always be considered the most trusted and stable cryptocurrency of them all. Even if Bitcoin does not succeed in becoming a global medium of exchange, many analysts believe that Bitcoin will act more as a store of value, in the same way that gold is viewed as a safe haven around the world. For an asset to be a store of value like gold, you must be able to save it, retrieve is and exchange it when required. For the last 10 years, Bitcoin has been saved, retrieved and exchanged so it could be on its way to becoming a store of value.
Final Words
While Bitcoin has been around for over 10 years, this digital currency has seen its ups and downs and has either been supported or trashed by all kinds of people around the world. It is evident that timing plays a major role in the profitability of the crypto markets. For example, if you invested in Bitcoin in late 2017 and you held onto it until now, you would have lost a lot of money but if you invested in Bitcoin at the beginning of 2017 and sold at the end of that year, you would have made more than 2000% in profit.
Despite its very bumpy road, Bitcoin is still around 10 years after its birth. It is also one of the most promising technologies of the 21st century. The fact is Bitcoin has been tried and tested and has proven to be a steadfast crypto asset that doesn’t look like it is going anywhere. The reality is the future of Bitcoin is bright and in terms of the price, well, the sky’s the limit!