3 Reasons Why Bitcoin Will Soar Past $14,000 And Beyond

November 8th, 2020

3 Reasons Why Bitcoin Will Soar Past $14,000 And Beyond

Trust in government is near all-time lows in the United States. One of the ramifications of losing trust in the government is the loss of faith in their fiat currencies (currencies that float with no backing, such as gold – they are made from “thin air”). Ever since the United States entirely removed itself from all ties to gold in 1971, the Federal Reserve was free to print as many dollars as they wanted, having no more constraints, such as how much gold they had stored in Fort Knox.

 

Since 1971, gold has increased from a fixed price of $35 to as high as $2000 (in US currency) and beyond. One of the arguments made for higher gold prices is that the world supply is limited: after all, “you can’t print more gold.” Other countries have followed suit, having increased the world’s money supply in a parabolic fashion.

 

Bitcoin: The New Gold?

Some now ask whether Bitcoin is the world’s new gold. Its limited supply and easy transportability make it the preferred way for some to hold wealth in today’s world. Put this together with the following catalysts, and you are in for a Bitcoin fireworks show. This short video on Bitcoin explains that potential.

 

Covid-19

The worldwide pandemic has accelerated the world’s movement toward the use of cryptocurrency. Before the strike of Covid-19, countries were already moving toward a cashless society. The increased fear and uncertainty surrounding how the virus spreads have made many people and businesses leery of exchanging paper cash or metal coins. Have you noticed the signs at your favorite companies announcing these policies? This, combined with the flood of money printing undertaken by central banks to combat the virus’s fallout, has driven more interest and fiat currency into crypto.

 

Other drivers during the pandemic include another halving of Bitcoin. Halving occurs at predetermined times so that the supply of Bitcoin decreases according to a master plan. For more information on how this works, read this article. Recent developments also include the decision by PayPal to adopt Bitcoin on its platform, allowing users to transfer payments using Bitcoin. This further legitimates crypto during the worldwide 2020 upheaval.

 

US Election Uncertainty

Election season in the United States always stirs up more uncertainty. This year has been subject to increased tensions, including riots, the accusation of racism between politicians and citizens, and other hot button problems. Some fear that Donald Trump will win re-election and that the virus and the economy will spiral out of control. Others fear a Democratic victory by Joe Biden will result in never-ending spending, with bankruptcy soon to follow.

 

Additional issues surrounding the run-up to the 2020 election have included widespread fears that the election will not be decided for weeks. Or that the candidates will not accept the results, leaving the United States in limbo for an extended time. This uncertainty can provide more incentive for people to move their money into safe havens such as gold, and now Bitcoin. Bitcoin has been moving in correlation with gold in recent times, bolstering the argument that Bitcoin is the new gold.

 

Excessive Money Printing Worldwide

Central banks around the world have been printing money like never before in history. Take the United States, for example. They have set records month after month and even printed more in one month than in two centuries! Other countries have followed suit. In total, governments are printing 1.4 billion dollars per hour! Given Bitcoin’s limited circulation of 21 million over its entire life, it is looking more and more appealing to those wanting to protect their wealth and not see it devalued by non-stop Central Bank money printing.

 

What next?

Many of those who were once skeptical of crypto is now slowly jumping on board the Bitcoin train. Bitcoin is seen as the leader in the field and has attracted more capital than alternate forms of crypto. Bitcoin is currently being mined at a rate of about 900 coins per day. 2.4 million coins have yet to be mined. Recent estimates have also speculated that 3-4 million Bitcoins have been permanently lost, making the end total far less than the 21 million Bitcoin cap. All mining will essentially come to an end in 2140 when the last Bitcoin is likely to be mined.

 

What will take Bitcoin to sore pass $14,000 and beyond? Although we have touched on some of the reasons here, there will be more catalysts yet to come. Some even speculate that we are just getting started. We might even see $50,000, $100,000 or more. At some point, regulators will likely take increased notice as they try to control the crypto space more tightly and penalize large gains more heavily. However, before diving into crypto, it is wise to consider all of these factors and make sure that you are suited for the risk.

 

Crypto players have many reasons for venturing into this field. Some want privacy, some speculate on price increases, some want easy transactions, while others want out of government-controlled monetary systems. Whatever your reasons are, make sure that you are comfortable with and aware of the volatility and risks of using Bitcoin. It is still recovering from its crash in 2018; in December of 2017, Bitcoin nearly hit $20,000 but dropped over 76% in the next year, bottoming out just below $3,300 in December of 2018. One thing is sure with Bitcoin – there is never a dull moment, and things are always changing!

 

It seems to be that Bitcoin is favored by younger generations, as they are used to technology and more readily accept the idea that money can exist electronically. Gold, on the other hand, is favored by older generations. Either way, investors are increasingly driven to such safe havens during times of uncertainty. Thus, it appears that this will be important to get educated on so that you can arm yourself with knowledge and protection during these increasingly uncertain times.

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