Did-you-know-that-Bitcoin-has-repeated-several-bubbles-and-bursts-in-the-past

Why is Bitcoin Skyrocketing in 2021?

  1. The better-than-expected return of over 290% in 2020 caught people’s attention.
  2. Institutions and banks are warming to Bitcoin, and its acceptance as a means of payment increases.
  3. This year the third Bitcoin Halving took place and the supply is limited.

Traders can use Bitcoin as an important indicator of the market’s risk-taking behavior.

The rise of BTC means that investors are ready for bigger risks.

It also means that they see problems in other assets.

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5 Main Reasons Why Bitcoin Price is Rising

Bitcoin jumps from high to high and breaks new records in a blink.

Almost every morning we wake up and see Bitcoin hitting the highest level in its history.

What are the reasons behind this madness?

Let’s take a look at the most important bubbles Bitcoin has seen.

  1. Bitcoin return exceeded all expectations in 2020 with more than 300%, which attracted people to it as a hedging tool against the global recession, while gold rose only about 25% last year.
  2. Institutions and banks are warming up to cryptocurrencies, and accepting them as a method of payment. The big companies are currently promoting Bitcoin and string enthusiasm around it. And who leads this trend, no one but Mr. Elon Musk, after Tesla bought $1.5 billion of Bitcoin. In addition to other major companies such as MicroStrategy, PayPal, and MasterCard.
  3. Concerns about the expected decline in the US dollar during 2021 Bitcoin is also an inflation-proof asset, which most economies are expecting to rise this year.
  4. The negative and near-zero interest rate environment that central banks are adopting, to stimulate the exhausted economic growth from the Covid-19 pandemic, prompted investors to move away from high-yielding assets, towards low-yielding but high-value assets such as gold and Bitcoin.
  5. The possibility of the current bubble bursting and the break of the bullish trend soon, so speculators and traders rush to grab any opportunity to make a quick profit, which creates a large pressure on demand.

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5 Bitcoin Bubbles and Burst in the past

The most important bubbles that occurred in Bitcoin history and how did they burst

1. Bitcoin Bubble in June 2011

The first real bubble in Bitcoin history was linked with Dark Web and illegal business rumors.

During this bubble, Bitcoin jumped from $10 to $30 in just one week.

  • Peak: $29.58 (June 2011) *Highest price
  • Bottom: $2.14 (Nov 2011) *Price after the bubble burst

2. Bitcoin Bubble in November 2013

The first time in history that Bitcoin exceeds $1 000, and it didn’t reach this level again until three years later.

At the time, one bitcoin equaled an ounce of gold.

  • Peak: $1,242 (November 2013)
  • Bottom: $172 (January 2015)

3. Bitcoin Bubble in December 2017

Bitcoin’s most brutal and craziest bubble yet, when alternative cryptocurrencies emerged and initial coin offerings were introduced (100) which allowed founders to sell their new offerings directly to the public.

  • Peak: $19,665 (December 17, 2017)
  • Bottom: $3,164 (December 15, 2018)

4. Bitcoin Bubble in March 2020

Not a bubble, but Bitcoin prices collapsed by 50% within 24 hours to $5 000 with the beginning of the COVID-19 pandemic.

5. Bitcoin Bubble in October 2020

Price hold above $13 000, since then, it has been on a crazy rally.

It broke the $18,000 level, then $20 000, to jump to $34 000, to reach $41 980 for the first time in history in January 2021.

It calmed down a little later, only to return to break through the $52 000 to $58 000 during this February.

Will this bubble burst soon, or will we see more of a crazy journey until we reach $146,000 per Bitcoin, as JPMorgan expects?!

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