Bitcoin (BTC) Price Prediction for 2021, 2022-2025 and Beyond

2021-01-12

Bitcoin Breaks Through the Roof! BTC Price Analysis and PredictionsJana Kane

Bitcoin breaks a price record again! The coin broke the $34,000 mark on January 3rd, 2021. How did this advance come about? The rise to $30,000 really only started in the second half of 2020. It has been a turbulent year, both inside and outside the Bitcoin scene. Time for a brief look back: what big things happened in the world of Bitcoin, and how did this beautiful record price come about? And what can we expect from the crypto-king next? Will the price of Bitcoin go up even more? Let’s find out!

The article covers the following subjects:

Bitcoin in Short

We’re sure you know, but Bitcoin is the best-known digital currency (also known as cryptocurrency). It was the very first decentralized currency that works by means of blockchain technology. The currency was launched in 2009, in the midst of a global financial crisis. Because many people were suspicious of banks, Bitcoin immediately won the interest of a large group of people.

The system allows you to send “money” to someone else without the intervention of a third party. The data is not managed by one person but by all users of the network. This makes it one large decentralized database of transactions.

Bitcoin Price Development and Outlook

First of all, let’s address the price development of [Bitcoin][1]. In the image below, you can clearly see the various major events and the price increase. A lot has happened in the past year.

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March 13: Bitcoin Crash

The first news in the 2020 annual review is immediately the most negative. It happened on the night of March 12, when the price fell to $3,850 in no time (Coinmarketcap). However, the panic was not only in the crypto market. The coronavirus also caused a search for liquidity in the stock market. The AEX closed that week with the largest drop since 1987, a drop of more than 10%. The crash fits into the list of the 6 biggest descents ever.

With three other falls, the former exchange Mt. Gox was (indirectly) involved. That same night, the BitMEX derivatives exchange was temporarily out of reach. It was rumored that a failing stock exchange liquidation engine was the cause of the deep spike down. A few days later, the derivatives exchange tried to clear the air by announcing that it fell prey to two DDoS attacks.

May 11: Halving

In the past year, something unique happened that had not happened often before: the halving of the block subsidy. On the 11th of May, there was finally the news that had been long-awaited. For the first time ever, a miner processed a block with a subsidy of “only” 6.25 BTC. With that, Bitcoin entered a new era.

The timing was perfect: while the world was on fire and stimulus and money packages kept the economy going, the opposite happened with Bitcoin: assets became scarcer.

Since May this year, only 900 new BTC have come into circulation per day instead of 1800 BTC (as was the case for four years). This supply shock soon became visible in the price: the supply dried up, and the price rose.

June 4: Bitcoin Core Update

The news from the beginning of June may not have been spectacular, but it was not superfluous by any means. Throughout the year, many developers have worked hard on Bitcoin’s code. While this has not caused very big price increases, it is still hugely important news.

Bitcoin Core is the beating heart of everything that happens in the ecosystem. The 28th upgrade came in June. This upgrade was the result, which 119 developers worked on for six months.

The major improvement was that OpenSSL was removed from the code. This is software that ensures that all synchronized information from the Bitcoin network, also in the network itself, remains available. It’s a kind of database within a database, simply put. With version 0.20.0, OpenSSL has been “completely removed,” Folkson said. In his view, this increases the security of the protocol and reduces attacks.

July 22: BTC Banking

In July, the US Bitcoin industry got a bit more legitimacy. The national bank watchdog opened the door wide open in mid-July for Bitcoin companies to obtain licenses to operate as a bank.

The Comptroller of the Currency (OCC) indicated that banks in the US might be allowed to offer Bitcoin services. The OCC is a government body that supervises the national banks. They monitor the enforcement of the laws.

This mainly concerns custody services, i.e., the storage of Bitcoin. In the second half of the year, the first companies have already jumped on this news: Avanti, Kraken, BitPay, and Paxos have all applied for a license and bank charter.

Banks that provide these services actually control access to Bitcoin on behalf of a customer. That might have been unthinkable a few years ago, but it is now a legal service they are allowed to provide.

August 6: MicroStrategy

The most bullish news of 2020 comes from August. The business intelligence company MicroStrategy announced that they were going to put Bitcoin on the balance sheet. The reason? The Inflation Ghost. Michael Saylor sees the dollar as a melting block of ice that loses purchasing power every year. During the year, Saylor emerged as a [permabull][2]. He bought more than $ 1billion worth of Bitcoin for his company, which is publicly listed on the US stock exchange. He did this in multiple batches.

On August 6, MicroStrategy traded $ 250 million for 21,454 BTC. Around September 15, the company took it a step further with 16,796 BTC. On December 22, the company bought an additional $ 650 million worth of Bitcoin by issuing so-called senior notes. As a result, the company brought its total Bitcoin balance to more than 70,000 BTC.

October 2: BitMEX

In addition to the price hike, perhaps the most shocking news of October was all about the derivatives platform BitMEX. The exchange has been sued by the US Commodity Futures Trading Commission (CFTC). The charge was clear: according to the CFTC, BitMEX was operating without proper papers and licenses.

Ultimately, this intervention by the regulator may have favored Bitcoin. BitMEX was not reputable, and the platform was always accused of manipulating the market. Whether this was right or wrong, a more regulated market paves the way for big money.

October 21: PayPal

PayPal opened its doors to Bitcoin in mid-October. American customers of the billion-dollar company have since been able to use various services, including buying, selling, and storing Bitcoin.

PayPal does not facilitate withdrawals, however. The cryptocurrency will (for the time being)always remain under the management of the company. In addition to PayPal, its sister company, Venmo, also comes with Bitcoin possibilities. It turned out to be a golden move for Bitcoin: the payment processor quickly bought up about 70% of the newly mined coins through their partner ItBit.

In response to the news, the price of Bitcoin skyrocketed. A week later, on October 28, it even hit its 2020 high of around $13,900 (Bitstamp & Coinbase). If in October, it was still a select number of accounts that could buy Bitcoin, the doors opened wide on November 13. It again resulted in a price increase.

Fall 2020: Institutional Money

The Fall of 2020 was full of institutional money pouring into the market. MicroStrategy kicked it off, but soon others followed. Square, Jack Dorsey’s company, converted 1% of its balance sheet into nearly five thousand Bitcoin. Stone Ridge later also followed for $115 million.

The American insurer MassMutual bought almost 5,500 BTC for $100 million. Guggenheim Partners also participated. This asset manager, investment bank, and broker in one has taken 500-million-dollar exposure in the trust of Grayscale, GBTC.

Ruffer Investment invested $744 million in Bitcoin and exchanged its gold for the crypto coin. That is about 2.7% of the assets that the British company manages. It is said to be 45,000 BTC. Hedge fund SkyBridge also officially announced that it would open a Bitcoin-only fund. They join a growing list of asset managers who do not want to pass up the cryptocurrency price action. They also bought up $ 25 million worth of Bitcoin themselves.

All-Time Highs

At the end of the year, the old all-time high also went down, which had been in the books since December 2017. On November 25th, the “20k” mark was broken for the first time. On December 31st, the price hit a new record high of around $29,300 (Coinbase, Bitstamp) after experiencing a rise of several thousand dollars during Christmas. And finally, on the third day of the new year, BTC reached a huge new record: $34,000 per Bitcoin! Currently, Bitcoin is traded at $34 418.08.

Image source: Coinbase

Bitcoin Price Predictions for 2021 by Crypto Experts

Bitcoin has been setting jaw-dropping records over the past couple of days. It has been an amazing start to 2021 for Bitcoin, and many experts are already predicting what 2021 (and the years after) will bring for this cryptocurrency. So far, opinions have been even more optimistic.

According to a [Finder.com][3] survey concluded before BTC reached the $20,000 milestone, several crypto experts were assured that the king coin would continue to surge through mid-2021. Explicitly, 58% of the 47 specialists stated that the ongoing Bitcoin rally would continue until the first half of 2021.

Also, the survey discovered that panelists are confident that the Bitcoin price would have grown two times by the end of the coming year. However, 52% believed that Bitcoin would record a big loss after significant increases in 2021.

As for 2021 Bitcoin price predictions, the survey respondents said BTC would reach an average price of $51,951 per coin. In November, [Citibank][4] analyst Tom Fitzpatrick noted that Bitcoin would hit $318,000.

Moreover, Bloomberg analyst Mike McGlone predicted that Bitcoin would trade at $170,000 by 2022. In an interview with Bloomberg Television, he [said]5.

“The key thing about Bitcoin this year is very simple - it just added a one to the front of the number. Remember, it was around $7,000 at the end of last year. What I’m worried about- if you look at the past performance, which is potentially indicative of the future, next year or two could add a zero to the back of the number.”

Earlier this year, Morgan Creek CEO Mark Yusko [said][6] that Bitcoin could trade at $100,000 in 2021 or 2022. In the interview, the CEO added that BTC could also climb $400 to $500k.

Bitcoin Technical Analysis

Bitcoin has a clear rising market trend in the medium-to-long term; this signals a stronger rate of growth (which is impressive), but this positive development might result in short-term corrections. There isn’t any resistance in the BTC price chart, and there is an indication of further rise. In case there is a negative reaction, BTC has support at 19,000. The cryptocurrency’s short-term momentum is very positive, with a Relative Strength Index (RSI) of more than 70. This shows that investors have increasing optimism and that there should be a further price increase for BTC. Yet, a high RSI with big cryptoassets might also be a sign that the cryptocurrency is overbought – and when this is the case, there is a chance of a downwards reaction if the indicator breaks below the 70-level upside down. Overall, though, BTC is assessed to be technically positive across the medium-long term.

Bitcoin Price Prediction in 2025

What applies to the weather forecast also applies to Bitcoin. The further you look into the future, the more difficult it will be to make a prediction. In 2025, the world may look very different from what we now sketch. Nevertheless, we make an attempt. What will 2025 bring for Bitcoin?

Many analysts agree that Bitcoin does not take the middle ground. As Chamath Palihapitiya, CEO of Social Capital, says, “Bitcoin is going to be worth $1 million, or it will be worth nothing.”

We do not dare to make an exact prediction of the price of Bitcoin in 2025. The Bitcoin price simply depends on too many factors. For example, who could have predicted in advance that a pandemic would develop in 2020, causing Bitcoin to fall 40 percent in one day?

We can, however, look at the long-term price development. And at the moment, things are still looking good for bitcoin. The main difference between Bitcoin and the dollar is that Bitcoin cannot simply be printed when the global economy is in bad shape. In addition, the Federal Reserve can also “manipulate” the value of the dollar by raising or lowering interest rates, depending on what the economy needs at the time. The result: inflation.

New Bitcoins, on the other hand, are issued at a predetermined rate. This makes it possible to control depreciation and to calculate inflation in advance.

Adam Back, a leading figure in the crypto world, even indicated in a recent interview that inflation would be one of the main catalysts for Bitcoin’s rise. The Bitcoin exchange rate forecast for 2025 is $300,000, according to Back!

In the coming years (and perhaps decades), the effective value of the dollar will continue to decline as more money is printed. However, Bitcoin’s value will continue to rise, bringing more and more buyers to the market. The demand then rises faster than the supply so that the price of Bitcoin continues to grow.

Bitcoin Historical Price Changes

Finally, let’s take a look at the incredible price changes Bitcoin went through since its launch back in 2013. Analyzing such historical price charts may come in handy when making price predictions:

Is Bitcoin a Good Investment?

The digital currency [Bitcoin][1] has risen above $30,000 for the first time on Saturday, January 2nd, and then even hit the level of $34,000. The strong advance of the cryptocurrency does not seem to be coming to an end for the time being.

Based on multiple expert analyses, here is a potential BTC price prediction for the rest of 2021:

Month	Open	Min-Max	Close	Total,%

2021
Jan| 28,994.01| 29036-49873| 46204| 59.1%
Feb| 46204| 45698-61336| 53597| 84.5%
Mar| 53597| 53597-66525| 62173| 114%
Apr| 62173| 62173-77169| 72121| 148%
May| 72121| 72121-89516| 83660| 188%
Jun| 83660| 71211-83660| 76571| 164%
Jul| 76571| 74226-85400| 79813| 175%
Aug| 79813| 79813-99064| 92583| 219%
Sep| 92583| 83230-95760| 89495| 208%
Oct| 89495| 89495-104769| 97915| 237%
Nov| 97915| 97915-121532| 113581| 291%
Dec| 113581| 88729-113581| 95408| 228%

Back to the present: after reaching the $30,000 milestone, the value of the digital currency increased further almost immediately. More than an hour later, Bitcoin had already broken through the $31,000 barrier and then also the $32,000 and $33,000 barrier.

On Sunday, January 3rd, Bitcoin was above $34,000. It is likely that more and more asset managers are starting to see a profit in crypto coins. Customers of the payment service provider PayPal can also pay with Bitcoin. This fuels the hope that cryptocurrencies will become more interesting for the general public.

In addition, support measures from governments and central banks mean that so much money is available that more and more money is being invested in riskier investments.

Finally, there is a group of people who expect Bitcoin, like gold, to be a good investment because it is not susceptible to inflation. The current advance started last year. The digital currency then roughly quadrupled in value, according to data from Coinmarketcap.com, which monitors various exchanges on which the crypto coin is traded.

Bitcoin Price Prediction FAQ

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