Bitcoin appears to be building increased momentum as it has finally surpassed the $50,000 mark for the first time since April. The major reasons for this rise include increased adoption and an influx of investors into the crypto space.
Bitcoin was predicted to hit the $100,000 milestone by mid-2021, but the world’s most popular crypto has failed to live up to this billing. Coming into the year at a valuation of $34,622, it peaked at $58,734 in March before crashing below $35,000 in May, according to data from Statista.
While its march to $100,000 this year has been heavily derailed, the crypto seems to be bouncing back from its disappointing slump, enjoying more than 70% rise from the slump in May to currently trade at around $50,300.
A year of mixed fortunes for Bitcoin
2021 has been a year of mixed fortunes characterised by several ups and far too many downs for the world’s most expensive cryptocurrency. Its biggest problems so far have stemmed from the impulses of major adopters on one hand and regulatory concerns on the other.
Barely 2 months after American billionaire, Elon Musk said that his electric car company, Tesla has started accepting Bitcoin for payment, he made an abrupt U-turn announcing that the company would no longer accept Bitcoin payments due to energy-related concerns.
Bitcoin would witness a 16% crash in price leaving many investors with losses while financial experts expressed concerns about the stability of a currency that could be so easily affected by the opinion of one man.
The other problems were largely regulatory. First was the US investigation of the world’s largest crypto exchange, Binance in May. The platform was alleged to be used for money laundering and tax evasion. That news sent Bitcoin price crashing a further 3% to trade below $50,000 for the first time since March.
The regulatory woes would continue after China banned transactions using cryptocurrencies and warned investors against speculative trading in them in May. Bitcoin price plunged more than 10% following that news as it traded at around $35,000 while Bitcoin miners left the country in droves.
But it wasn’t all gloom for the cryptocurrency. In June, El Salvador became the first country in the world to adopt Bitcoin as its national currency. Although the decision was met with stiff opposition from the opposition party and the public, President Nayib Bukele and the parliament held their ground.
Other factors that led to Bitcoin recovery includes Microstrategy’s acquisition of $490 million worth of Bitcoin to bring its total to 105,000 coins, Twitter CEO, Jack Dorsey insisting that Bitcoin is a major part of the company’s future, and Elon Musk announcing that Tesla is back in the Bitcoin fold.
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