2 key Bitcoin price indicators show pro traders are waiting for $50K

Bitcoin never fails to amaze with rate changes. In mid-December, it broke the all-time record of 2017, approaching $ 20,000. In the next three weeks, Bitcoin doubled in price and reached $ 42,000 per coin.

In early February, 2021 the BTC cost exceeded $ 47 thousand. The rapid growth was noted against the backdrop of Elon Musk’s announcement of Tesla’s $ 1.5 billion investment in Bitcoin, which was undoubtedly the loudest event for the crypto market at the beginning of February. The founder of an electric car company has written his name in crypto history. In a week, on February, 16 the BTC rate  for the first time in history crossed the threshold of $ 50 thousand, as evidenced by the trading data.

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According to the opinion of market experts, until the end of the week, Bitcoin will try to hold on to about $ 50 thousand per 1 BTC, and the rate will continue to be fueled by the excitement in the market. They underline that the current situation is fundamentally different from the previous BTC takeoff in 2017. Honestly, two factors have changed:

1) The state of the global economy has worsened;

The USA and the EU have decided to stimulate their economies with additional expenses. Many investors believe that massive stimulus measures will weaken the euro and US dollar. There are also fears that an increase in the money supply will lead to an acceleration in inflation. Against the backdrop of these concerns, investments in Bitcoins have increased, which supply is limited. In addition, experts and investors expect the use of cryptocurrencies in the traditional financial system to increase. This is indicated by the decisions of individual companies. For example, earlier payment services Square and PayPal, which provide services to almost 300 million people in total, added the option to buy cryptocurrencies via their applications.

2) The level of сredibility of crypto assets by investors has increased;

After Musk’s statement, Twitter’s interest in Bitcoin, we can talk about the signs of significant loyalty to the first cryptocurrency. Of course, regulators may change their minds, but at this stage everything is moving towards opening ways for corporate investors to invest in Bitcoin:

  • Payment giant Visa announced last week the release of its own system (API) for buying cryptocurrencies, which will be integrated with banks. The product launch is scheduled for the end of this year. A digital bank First Boulevard is going to be the first user of the service.
  • Mastercard plans to allow its cardholders to operate using certain cryptocurrencies. 
  • The oldest bank in the United States, Bank of New York Mellon, also announced the start of working with Bitcoin and other cryptocurrencies. It will store and conduct digital asset transactions for the benefit of its clients. The company is developing a special platform that will allow cryptocurrency transactions in the same way as it happens with traditional assets. 
  • Referring to the sources Bloomberg reports that Morgan Stanley is considering investing in Bitcoins. 
  • Uber reported that the company decided not to invest in Bitcoins, but it is still considering accepting cryptocurrency as payment. 

According to the analytical note of JPMorgan Chase`s strategists, Bitcoin competes with gold for capital flows, and in the long term, the pioneer cryptocurrency could rise in price to $ 146,000.

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However, JPMorgan experts make an important caveat: Bitcoin will be able to catch up with gold in popularity only if its volatility drops to the volatility of gold. This is a prerequisite for attracting more institutional investment in Bitcoin. JPMorgan highlights several problems that could at least limit Bitcoin’s growth in the short term. In particular, the bank points to a large amount of accumulated long speculative positions and an increase in the number of small BTC wallets, which indicates the entry of a large number of retail investors into the market. So, in case you want to convert BTC to ETN or to other coins you’d rather wait and keep as many BTC as possible in your portfolio to gain more profit by the end of 2021. 

However, some experts still consider Bitcoin a “bubble”, which value will collapse sooner or later. Even investors anticipating the growth of quotes warn that cryptocurrency trading remains extremely volatile and sharp price fluctuations are to be expected.

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