2020 has a lot in store for Bitcoin, and various events around the world are actually setting this asset up for a bull run. We’ve already been given a glimpse at how the Bitcoin market could potentially turn out this year. For starters, it has only been the second month of the year, yet, the virtual asset has spiked by approximately 37%. But apart from high demand, there are other major factors that could push Bitcoin’s price to new highs. Let’s take a closer look.
1. Bitcoin Halving:
The halving slated for May 2020 will cut down Bitcoin’s supply by 50%. When that happens, the asset could potentially surge to heights not seen before. The latter can be attributed to the fact that fewer coins will circulate between more hands. Besides, a lower supply at the end of the day is bound to spike the asset’s price.
On the other hand, this spike was evident in the last two halvings. These were in 2012 and 2016, respectively. In 2012, the virtual asset, which was priced around $11 surged to $1,100 by December 2013. Similarly, it surged from around $400 in 2016 to $20,000 in December 2017. If history repeats itself, we may be in for a great bull run.
2. Market Sentiment:
Speculation has time and again been attributed as a driver of Bitcoin’s price. Accordingly, sentiments are high this period that there is nothing stopping Bitcoin from surging, especially with its halving around the corner. These bullish sentiments have been backed by the major leaps the leading cryptocurrency has made since the start of the year.
So far, Bitcoin has spiked by approximately 37% since January 2020. Several altcoins are also taking charge instead of warming the back seat like last year. What’s more, well-known members of the crypto space believe now’s the time for Bitcoin to make a major leap. An instance of this is Tom Lee, co-founder at Fundstrat Global Advisors who reportedly said Bitcoin can make an average of 197% gain in the next six months since it has broken out of its 200-moving day average.
3. Cash Limitation:
People don’t really like to be controlled or limited, however, we don’t always get what we want, so we find alternatives. The recent limit on how much cash can be moved from certain countries has driven their residents to digital currencies like Bitcoin. Countries like South Africa have set a credit card limit for international transactions.
Also, there are expectations that this cash limitation may continue this year. And if it does, individuals in more countries would be looking for an alternative to move money in and out of their location without restrictions.
4. Economic, Health, and Political Crises:
Economic, health, and political crises seem to be happening concurrently this year. In early January, there was the U.S. Iran war, and the search term, “World war II” began to trend. Thereafter, news broke of a coronavirus epidemic in China. In these two events, Bitcoin has made leaps and one may wonder how these events correlate with it.
Nonetheless, the leading cryptocurrency is used as a safe haven in times of crisis. It aids in seamless transfers without intermediaries. In China, for instance, digital assets reduce contact with physical cash, thereby reducing a person’s risk to be infected. Similarly, countries like Turkey, Venezuela, Argentina, etc. turned to the asset in the face of inflation and devaluing fiat currency.