Can I be the next Bitcoin billionaire?
Written by Ms.Florence Ip and Dr. Kyle Wong
The famous ARK fund manager, Cathie Wood, increased her Bitcoin target to USD400,000 on 10 February 2021. The price has been rising like a rocket since November 2020, just after Pay-Pal had enabled their users to buy, hold and sell Cryptocurrency on 21 October. The market capitalization of Bitcoin hit USD1 Trillion in early 2021, reaching USD 58,330 all times high on 21 February (data from coinmarketcap.com). Year-to-date return as of 3 Mar 2021 was 475% and 5-year return was 12,440%. It was USD1 in 2011.
People buy Bitcoin because of their faith in Blockchain technology with the idea of decentralization. Some people buy it because of they don’t trust fiat currency. Some buy Bitcoin to hedge against inflation. Others buy it to diversify their investment portfolio.
When money is printed by governments around the world, people will demand more Bitcoin to preserve their purchasing power. When Bitcoin price goes up, hedge fund managers will need to invest a portion of their portfolio into Bitcoin to diversify risk and gain a better return and to beat other fund houses. Interestingly, a new blockchain app is offering their users to aggregate all kinds of their digital assets, including loyalty points, in-game assets and air mileages, E-vouchers and coupon, then to convert them into cryptocurrencies. This will further increase the demand for Bitcoin and other cryptocurrencies. In fact, the higher the Bitcoin price, the more investors will be attracted.
However, Bitcoin has a limitation of issuance. Only 21million will be mined eventually, and there are around 18 million coins have been created since inception. When the demand is increasing but the supply is shrinking, Bitcoin price has to go up because buyers can only acquire from the existing holders who are not willing to sell anyway.
ABCD development Website: abcdevelopment.org
ACH Worldwide Limited Website: www.ach-worldwide.com
ACH articles: http://www.ach-worldwide.com/blog.html
ACH Worldwide Limited Email: firstname.lastname@example.org