The world’s largest cryptocurrency, Bitcoin, is showing no signs of slowing down its rapid growth. According to data compiled by Matrixport, the world’s leading digital asset custody and prime broker service provider, the next target for bitcoin is near $36,000. This is yet another milestone for the pioneering cryptocurrency, which has made several headlines over the past year due to its meteoric rise.
1. Bitcoin’s Next Target Nearing $36K: Matrixport Data
Following the significant emergence of institutional investors in Bitcoin markets, the world’s most prominent digital asset is inching closer to another milestone. According to Matrixport data, Bitcoin is nearly reaching the $36000 mark, with the cryptocurrency trading hands near the $35700 region as of the time of this writing.
Analysts remain bullish on the near-term outlook of Bitcoin, citing the number of institutional investors investing in the cryptocurrency as the primary factor. For instance, adding to the steady rise of Bitcoin, payment services giant, Square Inc, announced the purchase of $50 million in BTC. Similarly, several asset managements firms, including Grayscale, Three Arrows Capital, and others remain confident in Bitcoin’s long-term outlook.
Experts are now giving an optimistic view of Bitcoin’s future performance, with some expecting the cryptocurrency to breach the $50,000 mark in 2021. Citing increasing demand from investors, VanEck investment strategist, Gabor Gurbacs conveyed that you can expect more money to flow into the Bitcoin market. He further indicated that Bitcoin might surpass $50,000 in the foreseeable future.
Aside from the trading price, other considerations have also seen a significant rise, including the number of active addresses and hashrate. Notably,
- the number of active Bitcoin wallets has seen impressive growth of 190,000 over the past week
- meanwhile, the hashrate has spiked to 143 exahash per second (EH/s)
These metrcis suggest that Bitcoin continues to see growing interests from both institutional as well as retail investors.
2. Bitcoin’s Resilience in Face of Market Turbulence
In recent months, Bitcoin has been able to display its resilience in the face of severe market turbulence. It has become clear that the cryptocurrency is able to hold its own amidst the stock market fluctuations and economic uncertainty.
One of the most impressive aspects of Bitcoin is its virtual immunity to the extreme market movements caused by the coronavirus pandemic. While many traditional assets tanked in March of 2020, Bitcoin remained largely unscathed; in fact, BTC improved over the month of March.
The coin’s limited supply and decentralized nature make it appealing to investors seeking a safe harbour during times of instability. Highlighting this is the recent institutional investment in Bitcoin, with companies such as Microstrategy, Square and Grayscale continuing to add BTC to their balance sheets.
Bitcoin’s resilience has shown that even when the traditional markets seem too risky, cryptocurrency remains relatively unhurt. As other asset classes continue to struggle, the coin’s stability and potential for growth has become very attractive for both institutional and retail investors.
3. Survey of Analysts’ Views On BTC’s Uptrend
Opportunistic Outlook
Cryptocurrency analysts are generally providing an optimistic outlook for Bitcoin’s near-term outlook. Several major players have increased their Bitcoin exposure, citing the rapid adoption of cryptocurrencies. According to fund manager Mike Novogratz, “the ecosystem is just getting busier and is becoming harder for the skeptics to ignore.”
Bullish Calls
The majority of analysts in the sector have also provided bullish calls on BTC’s uptrend. Analysts at Pantera Capital and Canaccord Genuity have both forecasted that BTC could reach $50,000 by the end of 2020. Other bullish analysts have cited numerous catalysts fueling the uptrend, including:
- Retail and institutional investor demand
- Increases in cryptocurrency-related investments and venture capital
- Improving network scalability solutions
- Growing general market hype
Bearish Sentiment
Meanwhile, some analysts remain bearish on BTC’s price action, expecting the uptrend to be short-term in nature. According to blockchain writer Dimitry Kalichkin, “Bitcoin is stuck in a price range that has been unable to break-out as new investors grow pessimistic about the near-term potential for gains.”
Volatility Risks
In addition, several market observers have cautioned against the potentially high levels of volatility associated with BTC’s price action. Analyst Nick Spencer has warned that the current market conditions could lead to a sudden correction, highlighting the need for investors to remain vigilant.
4. Steady Increase in Bitcoin Investment Signals Bullish Market
Investors Finding Value More Attractive
Bitcoin investment is on the rise with over $1 billion in inflows reported for the week of August 17. Since March of this year, Bitcoin has seen an impressive surge driven by an influx of institutional investors. This trend is indicative of a bullish market as investors find more value in the digital currency.
Rising Bitcoin Prices
Not surprisingly, the increasing Bitcoin investment has sent the price of Bitcoin soaring over the last few months. The surge of more than 200% this year suggests a promising price trend for the remaining months of 2020. Experienced investors expect prices to continue their upward trajectory despite the remaining uncertainties of the current economic environment.
Historical Perspective
In comparison to past investment cycles, Bitcoin is seen to be in the early stages of an explosive growth trajectory. Therefore, it is generally agreed that now is an advantageous time to enter into the market. The following are some of the famous catalyst events that have historically fuelled the growth of Bitcoin:
- Growing legal acceptance of Bitcoin as a form of payment.
- Increased availability of digital wallet services.
- Expansion of crypto marketplaces
- Increasing investments from institutional investors.
Conclusion
The steady increase in Bitcoin investment is a clear sign of a bullish market which is likely to continue throughout the year. Experienced investors are taking advantage of this period of growth to enter into the market and benefit from the continued rise in Bitcoin prices. Additionally, numerous historical catalysts have attributed to Bitcoin’s success and could fuel a potential bull run in 2021.
5. Matrixport’s Data Reveals Bitcoin on Track to Meet New Target
Audience (age and familiarity with topic): Knowledgeable
All the Data Points to Bitcoin’s Surge Continuing
Matrixport, a digital asset infrastructure service, recently conducted their own research involving key on-chain metrics for Bitcoin. The study revealed that the growth of Bitcoin’s network fundamentals has shown an upward trajectory in the past few months.
Bitcoin Network Activity Shows High User Engagement
The data revealed by Matrixport shows some impressive stats in Bitcoin user participation. A key statistic is the estimated addresses with a balance of at least 0.1 BTC, which stands at 24.3 million as of July 20th. The latest figure marks a 365-day high, and is a better indication of actual Bitcoin users, rather than token balances held by fewer people.
Strong Network Fundamentals Highlighted by Data
Bitcoin’s network fundamentals are also showing similarly impressive figures. Here are a few noteworthy ones:
- Average blocksize: 1.1 MB (12-month high)
- Average hashrate: 123 exahashes (also 12-month high)
- Transaction count in blocks: 104,250 (7-day high)
These statistics helps paint a clearer picture on the actual network activity of Bitcoin, and these figures have mostly been in a steady increase since the time of the major market crash in March.
New Targets Established by Long-Term Fundamentals
By plotting out various scenarios surrounding Bitcoin’s network fundamentals, Matrixport has established new target prices of $19,822 and $24,717 by the end of 2020. They sourced out their data from past and current price trends, along with on-chain median fees.
The data points to Bitcoin’s long-term outlook still firmly in the green, and these new milestones certainly give investors and traders something to aim for in the coming months.
6. Potential Benefits of BTC’s Price Appreciation
Investing in Bitcoin comes with many potential benefits. As the price of Bitcoin rises, so does the potential for investors to gain significant rewards. Here are some potential benefits of the price appreciation of Bitcoin:
- Asset diversification and wealth protection: By investing in Bitcoin, investors can diversify their portfolio and gain access to an asset with a low correlation to traditional assets. This can help to reduce risk in their portfolio and also increase potential returns. As the price of Bitcoin appreciates over time, investors may be able to protect their wealth.
- Real-time trading opportunities: Due to its volatile price movements, Bitcoin provides investors with a number of real-time trading opportunities that can help to maximize returns. As the price of Bitcoin appreciation significantly over a period of time, investors can capture these price movements and potentially rake in profits.
- Easy access to capital: With the rising price of Bitcoin, investors can easily access capital for investments in other projects. They can use the profits from their Bitcoin investments to fund their other ventures or to buy assets.
- Opportunity to explore new markets: As Bitcoin appreciates and gains acceptance as a viable global asset, investors may be able to explore new markets and capitalize on them. This can provide an opportunity to gain exposure to the high potential of these markets.
Ultimately, the potential benefits of the price appreciation of Bitcoin are vast, and investors stand to gain significantly if they choose to invest and capitalize on the appreciation. Bitcoin’s bullish price trend is only likely to increase, so investors have the chance to turn potential profits into reality if they join the cryptocurrency bandwagon.
7. Crucial Factors Influencing Bitcoin’s Price Movement
Bitcoin is distinct from traditional asset classes and so should be analysed and traded in a distinct way. To get the most out of Bitcoin, traders must understand the factors that influence its price movement.
Demand and Supply are possibly the most important elements to consider when trading Bitcoin. Demand is how much people are willing to pay for the currency, while Supply is how much is available for purchase. Factors such as news, market sentiment, cost of mining, regulation, among others can affect either Demand or Supply and thus the price.
Geopolitical Events and Risks can also impact the price of Bitcoin. Political and economic developments worldwide can move the Commodity market, including Bitcoin in some cases. For instance, in 2019 when financial difficulties hit Venezuela, Bitcoin trading volume surged.
Network Performance and Security can also have an effect on Bitcoin’s price. If Bitcoin’s network is slow down, it may discourage traders and investors, thus lowering the overall demand and price of the cryptocurrency. Additionally, the number and frequency of successful transactions made out the network impact the Bitcoin’s price indirectly.
- Demand and supply
- Geopolitical events and risks
- Network performance and security
These factors should not be overlooked when trading and investing in Bitcoin. Understanding them and keeping up to date with news about them is key for long term success.
8. Bitcoin’s Volatile Market Performance Examined
Since its emergence in 2008, Bitcoin has been one of the most volatile assets in the list of global tradable assets. The coin has seen dramatic price swings that have left investors scratching their heads, wondering how to account for the seeming lack of stability in the market.
This unpredictability reflects the varying sentiments in the market about the future of the asset, with short-term traders viewing the asset’s potential as either a safe haven or a hyped-up bubble. By necessity, this has left long-term investors in a state of confusion, since the coin’s long-term future remains uncertain.
Historically, Bitcoin has seen wild swings in pricing, from less than a dollar per coin to more than $20,000. It is this volatility that has kept the asset from stabilizing and becoming a more dependable asset in the global markets.
Recent studies have attempted to evaluate the degree of volatility in the Bitcoin market, concluding that Bitcoin’s risk-return tradeoff is comparable to traditional investments such as stocks and bonds. This assessment appears to be inaccurate, however, since the asset’s price movements have become increasingly unpredictable over time. Furthermore, the asset’s price action appears to be heavily influenced by speculative trading, which reduces the likelihood of finding a consistent valuation of the asset.
9. Challenges and Opportunities Ahead in Bitcoin’s Price Development
Price stability
One of the main challenges facing Bitcoin’s price development is its notable volatility. Large swings in the cryptocurrency’s price can make it difficult for investors to trust its long-term value. Even small variations in its price can result in large profits for investors, but also huge losses.
Scalability
A continuing issue for Bitcoin is its ability to scale. Currently, it is limited in how many transactions it can handle per second and further developments could be needed to make it an effective medium of exchange on a global scale. If the cryptocurrency isn’t able to cope with significantly larger transaction volumes, its usefulness will remain limited.
Network centralization
The concentration of Bitcoin’s network in a select few miners and exchanges bears risks. These entities could make decisions that work against the entire network, together with a few larger investors. Network decentralization will remain a key factor in ensuring the cryptocurrency’s price development can continue to benefit a large number of investors.
Regulatory action
The future trajectory of Bitcoin’s price development could be significantly influenced by regulatory developments. The laws, rules and regulations governing cryptocurrencies are generally still unclear in many areas. Any clarity or increased scrutiny on these aspects could potentially change the landscape for Bitcoin investors.
- Price stability
- Scalability
- Network centralization
- Regulatory action
Despite the current bearish market sentiment, the Matrixport Data report hints that the top cryptocurrency Bitcoin may be looking to $36,000 as its next target. With Bitcoin continuing to be a lucrative investment opportunity, investors are keenly observing its movements. Time will tell if the cryptocurrency is able to successfully reach the price point.