Analysis of Bitcoin Over the Decade (2010-2020)

PAST ANALYSIS

People who have made significant investments in Bitcoin over the last 13 years have recently had a difficult period. They were branded as people who were destroying the environment and were given names such as fraud people who believe in scams. The general perception around the world regarding Bitcoin is that it is a very volatile currency that sees huge fluctuation now and then. However, despite this criticism Bitcoin remains to be the most cherished digital currency and now people have started accepting it because of the trends and statistics involved in it. Still, there are instances where there has been huge bubble formation ultimately leading to tensions among the bitcoin investors. Initially, the big bubble was formed in the year 2011 when the price rose by around 3000 per cent. This just happened in 3 months. Click this image below to start your bitcoin journey.

Soon after this incredible rise, the bitcoin market fell and its value dropped to 2USD by November 2011.  After this, there was an initial recovery when the price rose to 13 USD by August 2015. The story of ups and downs continued when the price rose to 220 USD but fell to around 70 by mid-April 2013.

The rally did not stop here as the volatility continued in 2014 as well. The price fell from 850 USD to 580USD. This was majorly driven because one of the exchanges reported having lost around 850,000 bitcoins. In January 2014 the price again topped to 1000USD. This was the time when many retail investors started accepting bitcoin for sales.

WHAT ARE THE INDICATORS OF EARLY PRICE FLUCTUATIONS?

In the early days, there were very few investors and people didn’t take cryptocurrency too seriously. They used to buy and sell in a day or two. Whenever they saw the price fall, they would buy and whenever they saw the price rise, they would sell it. This meat profit booking was the major reason why price fluctuated at a rapid pace. Another reason why there was so much price fluctuation is that of the fear that the government would ban it. People were in a hurry to make money and exit this market.

The major factor that led to the drop in bitcoin price was Mt Gox which reported fraud on its exchange platform leading to a loss of 850,00 bitcoins. This made people worry about the security these private exchange platforms promised and people stayed away from this.

WHAT IS THE MAJOR FORCE DRIVING CURRENT TRADE IN BITCOIN?

The digital currency has now become a household name. But the factors which lead to its growth and fall have become more complex. In 2017 bitcoin gained huge public attention including many governments. Since then, the major factor driving its growth has been the regulations. Some countries accepted bitcoin while seeing it as a threat. But in the 21st century majorly all democratic nations have decided to regulate it but with stringent measures to stop illegal activities. Many exchange platforms like Bitcoin Era have emerged which provide people to invest and trade in Bitcoin. As bitcoin grew major financial players including institutional investors started investing in this technology. Since then, the major driving force behind Bitcoin fluctuations are the investment by institutional investors. This is somewhat good because institutions investing in bitcoin leads to an increase in liquidity and prominent players drive the growth in the financial market.  In 2020 bitcoin again started to rise thanks to accepting it as a store of value. In this way, it helped people to store their currency in times of pandemic when inflation and spending were on a high and thus ultimately promoting savings.

WHAT TO EXPECT

Many experts have analysed that digital currency is the way forward. But some worry about their security and financial risks. It is predicted that the value of One bitcoin will be $500,000 by 2030 while others say that this is just a phase and will fade away once the government’s hammer drops.