Virtual Currency

Bitcoin’s Bull Market Will Continue Into 2021

We’re inching closer to finally saying “so long” to 2020.

And today, we’re going to look back at one of the bold predictions I made to kick off the year.

In January, I wrote, “I think Bitcoin, with a reward halving just months away, is going to be more explosive in 2020.

And recently, I reiterated once again that I believe Bitcoin will hit new all-time highs.

We’ve covered cryptocurrencies and Bitcoin for years. It’s one of those alternative assets I love to play and think investors should have exposure to.

And today, digital gold is trading at levels it hasn’t seen in years.

In fact, prices haven’t been this high since the last time the central piece of my bullish Bitcoin outlook took place: reward halving.

Bitcoin’s reward halving unfolded on May 11.

This is an event that happens every four years and typically sparks an explosive run in the cryptocurrency’s price.

Keep in mind that there is a limited number of Bitcoin. It’s not like with a fiat currency where printing presses can run unabated at a central banker’s whim.

There are a mere 21 million Bitcoin. Although they can be broken into fractional pieces, there will never be more than that.

But here’s why half means more for the cryptocurrency.

A Reliable 10X Bull?

Bitcoin miners add blocks of transaction data to the Bitcoin blockchain. Once a miner completes a new block – and provides proof of their work – they receive Bitcoin as a reward.

Originally, this reward was 50 Bitcoin.

Then it was halved to 25.

Then it was halved again to 12.5 Bitcoin.

And in May of this year, it was halved once more to 6.25.

This makes Bitcoin harder to mine and reduces new available supply.

Now, just like any other mined asset, these two ingredients (along with booming demand) trigger a bull run.

And Bitcoin prices have skyrocketed each time a reward halving has taken place.

After the November 28, 2012, reward halving, Bitcoin shot up 8,357%!

In 2016, its halving caused its price to increase nearly 3,000%!

And this year, the cryptocurrency has blasted off since the reward halving.

Bitcoin Price Chart

Since May 11, Bitcoin has gained 107%!

As I write this, it’s trading at $18,320. But that could change by the time this article is published because its price moves so fast.

If history is our guide, its run is far from over. And 2021 could be another explosive stretch for the cryptocurrency.

For instance, if Bitcoin repeats the same halving cycle it did in 2016, the cryptocurrency could top $340,000.

As public support for Bitcoin grows, many see the $100,000 level as more realistic. But I think we should focus on the cryptocurrency topping $20,000 before we get too carried away.

Though it’s this optimism that will propel Bitcoin higher next year.

The Second-Year Charge

During the first year of a reward halving, Bitcoin does well.

But it’s the second year when the bull truly makes its charge.

For instance, from October 1 to November 30, 2013, Bitcoin’s price shot up 834%!

This was a final push higher after the first reward halving in November 2012.

Following the second reward halving on July 9, 2016, Bitcoin increased 294% by July 9, 2017. But the largest part of that bull market took place from July 9 to December 18, 2017, when the cryptocurrency shot up more than 665% in value to an all-time high of $19,783.21.

So, yes, Bitcoin has more than doubled since its reward halving on May 11.

But historically, this event has triggered a multiyear bull market, with the second year full of moneymaking opportunities.

That means there is potentially a lot of upside ahead for the cryptocurrency that investors love to hate.

I’m still not banking on a $340,000 price. Not in the near future at least. But as I’ve said in the past, I’ll be more than content with around $20,000 near the year’s end. To me, that’s fairly feasible, particularly with Bitcoin trading above $18,000. Then in 2021, I’ll expect another leg higher to even more all-time highs.

Bitcoin moves in these very pronounced waves – essentially a two-year bull market followed by a two-year bear market. And that has to do with the reward halving every four years.

I believe 2021 will stay true to this cycle.

Here’s to high returns,

Matthew

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