Bitcoin prices peaked at more than $ 40,000 less than a month after breaking $ 20,000 for the first time. Since the start of the latest rally, which apparently began in October, its value has quadrupled.
So for beginners and beginners alike, or if you want to be the cryptocurrency expert at your next Zoom party, it’s natural to ask: Why are prices going up and will bitcoin crash?
Bitcoin (BTC) was just invented 12 years ago as a new kind of electronic payment system, built over an internet-based computer network that no single person, company or government could control. The reality is that the cryptocurrency’s trading history is so short, and that the methods for valuing the asset are still largely untested, that no one really knows what it’s worth now or in the future.
Based on CoinDesk’s reporting, here are some key reasons why bitcoin prices have risen recently:
All of this could have led to a huge rally over the past few months. But can bitcoin prices collapse? Of course they could, several analysts told CoinDesk.
The price of the crypto-currency is notoriously volatile and significant and unexpected price fluctuations are not uncommon. Below is an example of comments from cryptocurrency analysts and other financial experts on what a downturn might look like and what might be causing it.
So for the Zoom party, you can tell them: Yes, according to the experts, there will probably be an accident, but this is typical for bitcoin, and if history is a guideline, prices are likely to recover.
Just do not tell them when.