The Bitcoin Super Cycle – Is This Really Happening?

There is no doubting the fact that at the moment, bitcoin is bullish. Investors are trying to get whatever they can out of the market. It seems everyone is quite happy seeing the prices skyrocket. But wait, this isn’t all that the bitcoin market has got to offer as there is still more. It is true that in 2013 and 2017, it has also experienced bull runs. However, there is every reason to believe this market cycle is quite different. Based on the current happenings, experts are beginning to predict that we are about experiencing a bitcoin super cycle.

Bitcoin is probably one of the hottest cryptocurrencies at the moment. It has been taking the front stage and making headlines over the years. However, what we haven’t experienced is a bitcoin super cycle. Of course, there must be one thing running through your mind at the moment. This is asking questions about super cycle and what doest it mean. This isn’t rocket science as you will soon discover in the coming sections of this post.

The story of Bitcoin so far

In the month of March 2020, the world economy suffered a major setback due to Covid-19. Just like other financial markets, bitcoin wasn’t an exception as its value reduced significantly. Within a period of 5days, it reduced to $9,875 from its previous $12,050. According to most investors, it was one of their darkest moments as they had to watch their crypto investments reduce in value. There were lots of panic selling since investors didn’t want to get hit anymore. Although this drop in price was experienced in 2017, that of 2020 was more serious.

The good news is that despite all of these setbacks, bitcoin didn’t drop to zero meaning it survived those horror moments. As a matter of fact, it has recovered in style by rising in value most experts never even predicted in the first place. There may be other cryptocurrencies that have caught the attention of investors over the years but bitcoin seems to stand out due to how its value is rising.

After it had experienced the all-time lows of that period (March 2020), it kept on scaling new heights. For instance, by the ending of July 2020, its price was $11,113.66. It kept on rising until December 2020 when its price was just below $24,000. Statistics have shown that between the beginning and ending periods of 2020, bitcoin price experienced an increase of around 224%. It seems records are now being broken on a monthly basis. This is because right now (as of March 2020), bitcoin is currently being valued at over $55,000.

Having seen how the price of bitcoin has not just overcome such a huge obstacle but also experienced a significant rise in value, there is definitely one question you may want to ask – is the bitcoin super cycle around the corner?

But what is a bitcoin super cycle?

Bitcoin super cycle is a situation when the price will begin to rise very fast. In other words, bitcoin will experience an increase in value that no one has ever predicted. It is a situation when the price rise will beat every imagination and scientific analysis. Given how the price has risen within the past 11-12months, it will be a very brave bet against such a prediction. For instance, some experts are predicting that it will hit over $200,000 by the end of 2021. Considering that it is almost $60,000 at the moment, there may be some people doubting. However, don’t forget that as of the month of January, it was just around $40,000. This means that within 60days, it has added around $20,000. If calculations are anything to go by, we should be expecting bitcoin to hit at least $100,000 by the end of 2021.

There are lots of bitcoin enthusiasts who seem to be predicting $1m in the nearest future. According to JPMorgan, bitcoin isn’t far away from reaching $146,000 before the end of 2021. He further claimed that Bitcoin’s rise has put it in a position to compete directly with gold. Of course, under normal circumstances, every market will experience a rise in price or value which is known as bullish periods. After some time, there will likely be a pullback whereby the price will fall again. The case of bitcoin has been very different. This has been typical of the market for the past 11months since it experienced that price drop in the month of March 2020.

Can the price of Bitcoin go down as in 2017?

In 2017, bitcoin price increased and such made experts to predict that there could be a super cycle around the corner. However, it never turned out to be the case as the price would later experience a fall. Based on this, there are cryptocurrency investors who are reluctant to make any prediction about its price hitting above $100,000. The truth is that this situation is quite different and it has got all the features to show that a super cycle is just around the corner.

For instance, based on the above analyses, you will notice how the market seems to be growing from strength to strength on a daily basis. The prices are not growing according to economic variables and other factors. What we are seeing is a parabolic rise that has managed to defy all the analysis of the financial markets from experts.

Don’t forget that the bull run experienced in 2017 was majorly retail-driven. There were few companies and institutions which showed interest in bitcoin. This was because of regulatory uncertainties about cryptocurrencies. It made few of the big players to be less interested in bitcoins. However, this current bull seems to be more real as compared to what happened in 2017.

What could be the cause of this super cycle?

In the above section, it was revealed that the 2017 bull experience couldn’t last. Due to this, predictions of experts that bitcoin would experience a super cycle never came to pass. Below are some of the reasons to believe that these events are real.

The big players

There are lots of heavyweights which seem to be interested in what the cryptocurrency market has got to offer at the moment. These could be top brands all over the world. For instance, Paypal, one of the world’s most popular digital payment platforms kicked against the idea of using its system for Bitcoin exchange initially. The major reason for this was because of the legal uncertainties surrounding bitcoin. It also claimed that bitcoin and other cryptocurrencies were not sustainable.

However, all of these have changed. Paypal is now using its system for exchange of cryptocurrencies. In one of its official statements, there are plans to allow the facilitation of transactions involving cryptocurrencies like Bitcoin, Bitcoin cash, Litecoin and Ethereum. Statistics have shown that over 350million people make use of PayPal from various countries around the world. Due to the support of Paypal, the price of bitcoin has increased.

The bottom line is that as other bigger players and brands will be embracing bitcoin and what it represents as the future digital currency, always expect it to rise. Of course, the interpretation here is that they are gradually initiating the super cycle period without knowing.

Here are some of the biggest companies that have invested in bitcoin:

CompanyTickerUSD worth of BTC
MicroStrategyMSTR$3+ billion
SquareSQ$300+ million
TeslaTSLA$1.5 billion
Galaxy Digital HoldingsGLXY.TO$770+ million

Bitcoin halving

Bitcoin tends to be limited in supply at the moment. For instance, it has been halved for the third time since coming into existence in 2009. This event takes place every 4years. Apart from time, it can happen after 210000 blocks have been mined. Whichever one that happens first, bitcoins will be halved. When this happens, the number of bitcoins available to min will be limited in supply.

The implication of this is that when demand exceeds such available amounts, there is likely to be an increase in the price of bitcoin. You should remember the law of supply and demand in economics. Increased demand will lead to shortage of supply. This will eventually bring about an increase in price. Bitcoin is going through this phase at the moment.

Institutional Adoption

It is true that the cryptocurrency market is highly volatile in lots of regards. For instance, prices of these currencies can easily change due to some market conditions. However, it is fair enough to say that bitcoin has shown lots of resilience in the face of inflation and market volatility.

This has made it an attractive option for major institutions around the world. For instance, private companies are beginning to invest in bitcoins more than ever before. A proof of this could be Tesla, Square and Microstrategy. With such an event, there is no doubt that the price of bitcoin will increase.

Final words

In conclusion of the above details, don’t doubt it when experts are saying the price of bitcoin could Hit $1million. Although, this may not happen in the next coming years, it will definitely become a reality given the signs bitcoin is showing right now. Ordinary people are becoming more educated about the blockchain and cryptocurrencies in general. Companies are figuring out ways to invest in them to optimize their gains. All of this will be continuing to push the price up.

Of Course there will be times when the price will drop and this is inevitable but these are the times whe real investors/traders shine. When the price of a cryptocurrency drops it doesn’t always mean that a bubble has popped. (We are of course speaking about the top cryptos, not some random hype coins)

If you are interested in learning more, you can have a look at our crypto guides or stock market guides.

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