The world’s most famous cryptocurrency Bitcoin is on the rise again, and has surpassed the $19,000 mark for the first time since 2017, which was also the year during which the currency hit its all time high.
At the time of writing this article, the value of the currency is $19,130 on CoinMarketCap, which is up 160% since January. The current value is closing in on its all-time high at $19,783, which was recorded in 2017.
The surge is being attributed to the scarcity of the currency and the fact that it is now being endorsed and accepted by the big online payment service providers and platforms like Square and PayPal.
Both the factors causing the surge in the value of the cryptocurrency share an interesting correlation. Since the payment companies have started accepting the cryptocurrency, they have reportedly been scooping up all the new bitcoins, and this is one of the reasons that has led to the shortage of Bitcoin.
Another significant factor being attributed as one of the reasons for the currency’s upward trend is Fidelity Investment’s decision to launch its Bitcoin fund, which added to the credibility of the currency in the eyes of investors.
Bitcoin was launched in 2009, and is the world’s first blockchain cryptocurrency. The currency is decentralized and is difficult to trace, which is also one of the reasons why its so popular, especially among individuals who seek anonymity.
The currency relies on a model of mining. Powerful computers dedicated to mining engage in a competition of solving mathematical puzzles every 10 minutes, while processing and validating blocks of transactions. The first to solve the puzzle is rewarded with Bitcoins, and this is how new coins are created.
In order to prevent inflation, Bitcoin halves the amount of reward miners receive every four years. The cryptocurrency went through a third round of halving in May, which also contributed to the scarcity of the currency as it reduced the number of new coins being created.
The sudden surge has also led Bitcoin investors and analysts to speculate about the cryptocurrency’s future. According to a report from Reuters, Brian Estes, chief investment officer at hedge fund Off the Chain Capital, predicts that the cryptocurrency could hit $100,000 and $288,000 by end-2021. Citi technical analyst Tom Fitzpatrick, predicts that the value can go as high as $318,000 by the end of 2021.
These are very big numbers indeed, and people like Kevin Muir, who’s an independent proprietary trader, are calling it a ‘mania’. He says that the currency hitting the predicted numbers is plausible but no one actually has a clue whether or not it will.