Bitcoin prices reached historic levels above $ 40,000 in less than a month after breaking $ 20,000 for the first time. Since the start of the most recent rally, apparently started in October, its value has quadrupled.
So for both professionals and newbies, or if you want to be the cryptocurrency expert at your next Zoom party, it’s natural to ask: why are prices going up and bitcoin will break?
Bitcoin (BTC) was invented just 12 years ago as a new type of electronic payment system, built on an Internet-based computing network that no person, company or government could control. The reality is that cryptocurrency trading history is so short, with methods for valuing the asset still largely untested, that no one really knows for sure how much it should be worth now or in the future.
Based on CoinDesk reports, here are a few main reasons why bitcoin prices have risen recently:
All of this may have led to a major recovery in recent months. But could bitcoin prices fall? Of course, several analysts told CoinDesk.
The price of cryptocurrency is notoriously volatile, and substantial and unexpected price fluctuations are not uncommon. Below is a sample of comments from cryptocurrency analysts and other financial experts on what a setback might look like and what can cause it.
So, for the Zoom party, you can tell them: Yes, according to experts, a crash is probably coming, but this is typical of bitcoin and, if history is any guide, prices are likely to recover.
Just don’t say when.