1. Accelerating adoption of Bitcoin at a global level

The number of people who adopted the most popular cryptocurrency steadily increased throughout the last year. More and more companies enable Bitcoin transactions and they see unprecedented customer demand. The steady increase seems to continue in the following period given that companies are transforming their payment systems accordingly. The increase is expected to lead to explosive price movements in Bitcoin, as seen in the past.

2. A response to the macro environment

The designer of Bitcoin, Satoshi Nakamoto, released the currency in 2009, the year of the Global Financial Crisis. He stated that the conventional currency demands trust but the history of fiat currencies and banks shows that this trust has been constantly breached. It was proposed as a solution to this crisis but it was largely ignored at that time. After a decade, in the middle of a new financial crisis, Bitcoin awareness and attention both by the individuals and companies grow.

3. Predictions based on Bitcoin Stock to Flow model

The analytical framework called the “stock-to-flow model” (S2F) was created by the pseudonymous investor Plan B in March 2019. The proposed formula quantifies the value of the cryptocurrency with 100% accuracy based on its scarcity. If this model continues to work, it is claimed that the Bitcoin value could reach $288k in the current cycle.

The formula proposes a negative correlation between scarcity and value. In the field of Bitcoin, there is a supply crunch building, according to the data. Especially after PayPal announced that it now accepts cryptocurrency transactions, in just two months, we witnessed a crazy increase in demand which alone buys more than the existing Bitcoin supply!

4. Wall Street’s growing attention to cryptocurrencies

Becoming the best performing asset class last year, Bitcoin finally received the long-deserved attention of Wall Street investors, companies, and analysts. Last year we heard the news about companies making million-dollar investments in Bitcoin and including cryptocurrency in their capital allocation strategy. MicroStrategy, a business analytics firm, took the lead and others followed. The company’s CEO Michael Saylor stated that “MicroStrategy has recognized Bitcoin as a legitimate investment asset that can be superior to cash and accordingly has made Bitcoin the principal holding in its treasury reserve strategy.”

5. Its history says so!

10 year-history of Bitcoin shows that it always surpassed its most recent all-time high even though it has been announced “dead” hundreds of times in the media.

When its price hit $30 in mid-2011, it was the top price it had reached since its entrance to the market. Throughout the years of peaks and troughs, despite drops in investor confidence, each time it managed to recover and mark new all-time highs.

Based on a variety of factors (growing adoption, supply shock, etc.), Bitcoin is expected to outperform this year.

It seems reasonable to have a bit of Bitcoin, right?