Looking at the trends, Bitcoin has shown more upward trend than downward with few periods of stagnation in-between. Bitcoin technology has registered a compound annual growth rate (CAGR) figure of 8.3% over the forecast period of 2021-2026. These trends and figure are greatly dependent on several factors and events. Factors and events includes the governmental policies put in place to regulate digital assets, the effect of the Corona virus pandemic, the digitalization of the payment industry, finally the lackluster dissemination of information regarding cryptocurrency.
Adoption of Bitcoin by bank and major financial institutions
To get to one hundred thousand or beyond by the end of 2021 will depend on continuous digitalization of money and adoption of digital assets by banks and other financial institutions. Major business are now accepting Bitcoin as their payment method while major players in the financial markets have been investing in Bitcoin to diversify their portfolio.
Impact of governmental policies
Next factor is the quell of talks from governmental entities about regulating Bitcoin transactions, trades or banning cryptocurrencies entirely. For example, In India, a law banning cryptocurrencies is in the works. Officials have said that the law will fine and criminalize possession, mining , and transferring of crypto-assets. While In China, The People’s Bank of China(PBOC) has issued a statement stating that it would block access to all domestic and foreign cryptocurrency exchange and ICO website but will not penalize possession. In Nigeria, the most populous country in Africa and the biggest economy. The Central Bank Of Nigeria (CBN) in early February has issued a warning to banks and financial institutions. The warning states that facilitating cryptocurrency trades are prohibited, the issue is still currently being debated.
Essentially, if the ban or regulations from these three countries, that stand to become key player in adoption can be reversed or loosened, Bitcoin will see a dramatic surge to 100K and beyond.
Demystification and de-risking of cryptocurrency
The next factor is the continual demystification and de-risking of cryptocurrency assets as an investment to the general public. That is, the more comfortable and knowledgeable the average person or investor feels about its utility or value, the faster the upward growth for all cryptocurrencies especially Bitcoin.
Effects of Corona Virus on Bitcoin
The last and final factor that is impacting the growth of Bitcoin and perhaps cryptocurrency in general is the Corona virus pandemic. The pandemic is playing a big role in that it creates a large sense of uncertainty. Consumer were less likely to take risk with their finances due to instability in their jobs and their income. Most consumer are not able to earn as well as they were earning prior to the pandemic. Therefore, investing in a risky asset such as cryptocurrency is far from their thoughts and perhaps unreasonable in their current financial aspirations.
In summary, Bitcoin has shown more upward trajectory than downward. However, the continuation of the Upward trend depends on effective control of the current pandemic; faster rate of digital payment adoption by banks and financial institutions; and the reverse of prohibitory policies. Once these factors are rectified, Bitcoin will undoubtedly break the 100K mark before the end 2021.