Bitcoin, fresh from one of the wildest years in its short history, has suddenly surged higher again, breaking through the psychological $30,000 per bitcoin level and taking bitcoin’s total value past $600 billion.
The bitcoin price is up almost 10% in the first two days of 2021 alone, putting it in poll position to become one of the year’s best performing assets and helping it eclipse the market capitalization of payments giant Visa.
Now, as the bitcoin and cryptocurrency community cheers the latest price surge, investors are already asking how far the rally will run—and if bitcoin will soon overtake Tesla
“The massive price increase of bitcoin since Christmas might be just the beginning of the next upward cycle for digital assets,” Marc Bernegger, bitcoin pioneer and member of the Board of Crypto Finance Group, said via email. “Compared to the past there are not mainly retail investors buying into digital assets but more and more institutional investors who look at bitcoin as a new and emerging asset class.”
The bitcoin price has added 20% since December 25, adding to gains of over 300% for 2020. Bitcoin’s boom, taking it far and away past its 2017 high of around $20,000 per bitcoin, was sparked by PayPal
The rally has taken the combined market value of all the bitcoin tokens in circulation from under $200 billion in October to over $600 billion now, with bitcoin passing Visa’s $511 billion market cap this week.
Bitcoin is now poised to overtake Elon Musk’s electric car company Tesla’s $668 billion value, though Tesla has seen its value climb at a similar pace to bitcoin in recent months as investors piled into the stock ahead of its introduction into the S&P 500.
The bitcoin price would have to climb to $36,000 for bitcoin’s total value to top Tesla’s current market cap—something many in the bitcoin and cryptocurrency community expect to happen sooner rather than later.
Ryan Selkis, the founder of crypto data company Messari, pointed to his October prediction that bitcoin will be worth $150,000 per token by the end of 2021 when asked about bitcoin’s prospects.
That would give bitcoin a market cap of $2.7 trillion—outstriping Facebook’s $778 billion, Google’s $1.1 trillion, Amazon’s
“My view is that one bitcoin will be worth more than $1 million this decade,” Cory Klippsten, the chief executive of bitcoin-buying app Swan Bitcoin, said via Telegram. “I have no idea of the path it will take to reach that level, though, and I would warn you against listening to anyone who says they do.”
If bitcoin does eventually reach a $1 million per bitcoin price, bitcoin’s total value would be over $18 trillion.
However, Selkis cautioned potential investors to “have a plan and stick to it because otherwise your emotions will take over” if the bitcoin price sudden moves lower.
The bitcoin price is highly volatile and has been known to swing double-digit percentages in mere minutes. The bitcoin price crashed to under $4,000 per bitcoin in March amid the broader coronavirus sell-off before rapidly rebounding.
While many bitcoin and crypto investors expect to see a correction in the near future, most are overwhelmingly upbeat going into 2021.
“I would not be surprised to see a healthy short-term correction after reaching several new all time highs in just a few days but due to the massive demand from professional and non-speculative oriented investors I am still quite positive for the mid-term and especially long-term,” added Bernegger.
Klippsten also warned prospective investors to do their research before jumping into the bitcoin market.
“As always, you’re better off investing in the things you know, bitcoin is no different,” said Klippsten, who has used Swan Bitcoin to raise awareness of how the cryptocurrency works.
“The amount of value people choose to store in the bitcoin protocol is generally correlated with their understanding of bitcoin. If you buy a lot of something you don’t understand, you’re much more likely to buy high and sell low. So think about buying some bitcoin as part of your education process, rather than as placing a trade in the hope of quick profit.”
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