How does the Bitcoin graph rise

Will Bitcoin rise to $ 100,000 in 2021 and $ 500,000 in 2025?

The rising Bitcoin price is currently attracting many investors again. It recently hit a new all-time high at $ 19,681. After a correction, under $ 5,000 in March 2020 would have been the much better entry point if one is convinced of the future of cryptocurrency.

The fact that the Bitcoin price is relatively speculative is shown not only by the enormous price fluctuations, but also by the very different opinions about its future.

The drivers of the Bitcoin course

Some investors expect Bitcoin to surge to $ 100,000 as early as 2021, which would represent a further increase of more than five times within just one year. This leap could be achieved very quickly by reducing the supply and is probably also intended to increase popularity.

Bitcoin technology was designed in such a way that the remuneration of the people who create Bitcoins with their computers (miners) is halved every four years. This process reduces the supply and thus leads to sharply rising prices even with a relatively low demand. The last so-called "Halving" took place in May 2020. Since then the course has more than doubled at the top.

In addition, PayPal and Square recently bought all new bitcoins for its cash app. The increase is therefore also driven by demand.

This year (2020), many people bought Bitcoin as a currency alternative because they see it as a safe haven as a result of the virus crisis and the increasing debt of many countries. But while, for example, the real financial strength of many countries is behind the euro and gold actually exists, bitcoins are virtually created constructs on computers. So there is no substance behind them.

Accordingly, their price can be easily driven up. Investors get the impression of a very valuable asset class, which Bitcoin is not. Extreme daily fluctuations suggest that few major potion promotions and actors influence the price.

$ 500,000 will be traded by 2025

Nonetheless, the co-founder of Gold Bullion International Dan Tapiero assumes that institutional investors will soon be investing trillions in Bitcoin and thus pushing the price up a lot.

“For the next five years, I see gold at $ 4,000, which is about twice as much as it is today. But if gold is at $ 4,000, Bitcoin is probably somewhere between $ 300,000 and $ 500,000, so that's an increase by a factor of 20 to 30. "At today's rate of $ 18,559 (12/10/2020) it would be actually an increase by a factor of 16 to almost 27.

Strict regulation could slow the increase

But there is also a major hurdle that Bitcoin and other cryptocurrencies are headed for: It is their regulation that is very likely to come, because they are currently often used for criminal business.

At least since Facebook announced its plans for a stable coin (cryptocurrency linked to the dollar), politicians have been alarmed. The G7 countries have already agreed and, above all, do not want to lose their currency monopoly. "There is strong support within the G7 for the need to regulate digital currencies," it said in a statement.

In the end, the strong regulation could mean that Bitcoin and other crypto currencies no longer have an advantage over euros or US dollars and thus lose a lot of their attractiveness.

The post Will Bitcoin rise to $ 100,000 in 2021 and $ 500,000 in 2025? appeared first on The Motley Fool Germany.

Hydrogen, solar, electric cars - our top investment ideas

Strong growth can make stocks fantastic investments. This is why it is so important that a company benefits from structural growth. This is exactly what is currently the case with renewables.

There are huge future opportunities here. We therefore looked around for our best investment ideas. Everyone knows Tesla, but these three stocks should come as a surprise.

You can request our free special report "3 stocks for the future of new energies" here.

Christof Welzel does not own any of the stocks or bitcoins mentioned. Randi Zuckerberg, a former head of market development and spokeswoman for Facebook and sister of CEO Mark Zuckerberg, sits on The Motley Fool's board of directors. The Motley Fool owns shares of and recommends Facebook, Paypal, and Square and recommends the following options: Long January 2022 $ 75 Call on PayPal Holdings.

Motley Fool Germany 2020

Photo: Getty Images