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Bitcoin
OpinionComment
Sagar Chaudhary
Sagar Chaudhary

Opinion | The bitcoin bull run is more than just hype this time – don’t be surprised by a US$20,000 price tag by year end

  • Stronger fundamentals, growing institutional interest and mainstream adoption of cryptocurrencies bode well for the prospects of bitcoin
  • The asset can also work as a hedge against macroeconomic risks

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Bitcoin, the world’s largest cryptocurrency, surged in value to hit US$13,000 in late June. Illustration: Reuters
Sagar Chaudhary
At the time of writing, bitcoin has just surpassed the US$13,000 mark. The last time we saw bitcoin reach this price was in December 2017, after which, the cryptocurrency went on to reach its all-time high of nearly US$20,000 in a matter of days.
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The cryptocurrency market remained bearish for all of 2018, but with the way bitcoin is charging upwards and setting new highs in 2019, it is safe to say that the crypto-winter is behind us already. In the past several years, we have witnessed a cyclical pattern emerging in the cryptocurrency space. And with each cycle, we reached exponentially greater heights.

This time around, analysts have come up with bolder price predictions, ranging from US$21,000 all the way up to US$100,000, all of which begs the question: is the current bull market any different from the last one?
During the peak of the 2017 cryptocurrency bull run, several sceptics compared it to the Tulip mania of the 17th century, with most convinced that bitcoin was a bubble. However, since 2017, bitcoin and other cryptocurrencies have come a long way in terms of maturity. Bitcoin fundamentals are stronger than ever, institutional interest is at an all-time high and mainstream adoption is on the rise, strengthening the argument for why the market is not based totally on hype this time.

Earlier this month, Blockchain.info reported that bitcoin’s hash-rate – the speed at which a bitcoin mining machine operates – reached a historical high of 74,548,543 terahashes per second. In simpler terms, the bitcoin blockchain is more secure than it ever has been and breaching the network would require unimaginable computing power. In addition, the average number of transactions on the blockchain has consistently risen. As reported by localbitcoins.org, the weekly average transaction volume has remained above US$50 million since September 2017.

Daily active bitcoin wallets crossed the 1 million mark in June this year, according to data published by Coin Metrics, providing another indication that more people are now using bitcoin.

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