Investing in Bitcoin remains a risky business. This much is a given when you look at how the cryptocurrency experienced dramatic and unpredictable price run-ups and painful crashes in its decade-long history. To this day, Bitcoin carries several risks, casting a cloud of doubt on whether it promises riches or ruin for interested parties.
But with Bitcoin gaining popularity and more people investing in this cryptocurrency, it’s important to be aware of the current trends surrounding this financial system. In this post, we compiled the latest Bitcoin trends to give you a better understanding of where things stand in the crypto market.
Bitcoin Trends Table of Contents
When Bitcoin was first launched back in 2009, the main idea was that someday, it would replace the current traditional financial system. For a while, there were talks of a future where the majority would pay for goods and services using a digital currency not controlled by any central bank or government. But fast forward to 2020, and this purpose failed to materialize. Bitcoin has been unable to grow as a payment option, and, until today, the mainstream media sees it as a complex, highly advanced piece of financial technology.
On the other hand, Bitcoin evolved and set its footing on a more persuasive and materialistic reality: it is now the new gold, rallying closely on par with its physical counterpart. Bitcoin is today’s “digital gold” and has retained its value, despite the wild fluctuations it experienced over a 10-year period.
The Bitcoin price over the years proved to be a rollercoaster ride for Bitcoin miners and investors. No one can accurately predict the Bitcoin value—it could reach a value of $1,000 and then skyrocket to $20,000 the following year, only to drop again after reaching an all-time high.
In 2017, for instance, Bitcoin was valued at $997.69, then rose to $13,421.44 in 2018. Then the following year, it spiraled downward from there, with its value dropping at $3,869.47 as 2019 ended.
Source: Leftronic (2019)
However, cryptocurrencies are increasingly becoming popular, and more people are taking an interest in Bitcoin investments. To better understand the power that Bitcoin holds and what it means to the future of finance, we compiled the latest Bitcoin trends you should pay attention to.
Crypto miners have much to look forward to in the coming months as this year marks the third halving of Bitcoin, and opinions are divided on how this will affect the Bitcoin price. Considering that the two previous Bitcoin halvings led to positive price movements, analysts believe that traders are in for another treat.
Also, surrounding this Bitcoin halving event is a spike in search interest regarding the cryptocurrency, with the term “bitcoin halving” experiencing a massive surge in Google Trends. As the much-anticipated event gains a lot of attention and hype in the mainstream financial media, it seems that the demand for Bitcoin could only soar, and a price surge would soon follow.
The halving of Bitcoin is a rare occurrence that happens every four years. In this event, the number of Bitcoin for every new block is cut into half. This means instead of the 12.5 Bitcoin reward for miners; it’s down to 6.25 Bitcoin.
In the two previous halvings, the months that followed saw significant appreciations in Bitcoin’s price. From $12 in November 2012, Bitcoin’s price peaked at $1,100 in the following year. Likewise, the second halving led to a price increase, from $650 in July to around $6,500 in the first half of 2017.
Thus, there are many positive predictions that surround Bitcoin’s price after the halving takes place. According to researchers and analysts at Nexo, a blockchain-based overdraft system company, Bitcoin is looking at a massive price surge due to the upcoming halving. Their study results revealed that Bitcoin could rise to $50,000 by the end of 2020.
Source: Coin Telegraph (2020)
Bitcoin as Digital Gold
It is no secret that Bitcoin shares some similar properties with gold and the Internet has gone as far as calling Bitcoin as “digital gold.” One striking similarity is how both gold and Bitcoins are finite resources, available only in limited quantities. As everyone in the crypto market knows, there can only be 21 million Bitcoins in circulation.
Like gold, Bitcoins are also obtained through a process called mining. But instead of physical mining, Bitcoins are mined virtually using a computer processing power to solve special computer encryptions.
Today, 18 million Bitcoins have already been mined, leaving more or less only three million Bitcoins to be introduced to the circulation. Once all Bitcoins are fully mined, the supply will simply be tapped out, with miners getting incentivized only from the transaction fees paid by Bitcoin users.
The idea of Bitcoin as digital gold became more prevalent when its 180-day Spearman correlation coefficient went above 0.1, marking a closer correlation with gold in the second half of 2019. On a related note, coefficients for Bitcoin Cash, Ethereum, and Litecoin fell below 0.05. This led to US Congress describing Bitcoin as a valuable crypto asset that could soon threaten the dominance of the US dollar in the global economy.
Meanwhile, in the competition between gold and Bitcoin as a global, apolitical store of value, crypto analysts point out that Bitcoin still needs to do plenty of work in order to catch up. Even so, Bitcoin’s close correlation with gold separated it from the rest of the cryptocurrency market, indicating a wider range of opportunities for those in the crypto landscape.
Bitcoin as Payment Method
As Bitcoin continues to capture public interest, it is only natural that a number of services and merchants have started accepting Bitcoin as a payment option. Thanks to emerging Bitcoin payment gateway solutions today, businesses are now able to receive payments in Bitcoin. They work similarly to the standard credit or debit card payment processors, except that Bitcoin transactions are irreversible. For businesses, this means zero chargebacks or payment reversals and having much-heightened security against fraudulent attacks.
Furthermore, Bitcoin gives its users the upper hand when it comes to determining transaction fees, unlike in credit card transactions with fixed charges. Depending on your processor, credit card transaction fees can charge you up to 30%. Paypal, for instance, charges 3-4% plus a fee for every transaction. It may seem like a little amount, but these fees add up, especially for businesses that only sell low-cost products.
In Bitcoin, transaction fees depend on how fast you want to receive your money. The fees go to the computers hosting the network, so the larger the transaction fee you pay, the faster you get to receive payments.
Today, the number of active Bitcoin users is estimated at 5.8 million, a figure relatively small when compared to Paypal, Mastercard, and Visa users. Mastercard boasts 604 million active users globally, while Paypal has 235 million users worldwide. Meanwhile, Visa remains the top payment option for many, garnering approximately 736 million users from all over the world.
Nonetheless, businesses that managed to get the better seat on this bandwagon have discovered that it pays to develop a Bitcoin strategy—simply putting up the sign “Bitcoin accepted here” signals that their establishments are at the forefront of technological development, taking advantage of how the crypto community goes out of their way to support businesses that welcome digital currencies like Bitcoin.
Source: Bitcoin Market Journal (2020)
Facebook’s Libra Project
When Facebook released its proposal for a new cryptocurrency called Libra, it gained mixed reactions from the crypto community. This led to many now questioning what its long-term effect on Bitcoin will be. For some, Libra is basically just another Paypal, except that it also uses blockchain technology. There are also others who are led to believe that the launch of Libra could lead to more opportunities for traditional cryptocurrencies like Bitcoin to hit the mainstream financial media.
As the two cryptocurrencies become the talk of the town, their differences become more pronounced. For instance, Bitcoin operates in a decentralized peer-to-peer network. In contrast, Libra is operated by a group of large organizations that are subjected to government regulations from all over the world. In addition, Libra remains reliant on government-issued currencies, unlike Bitcoin that has its own fixed, apolitical supply schedule.
However, this doesn’t stop crypto enthusiasts from keeping tabs on recent development in the newest cryptocurrency. Since Facebook revealed its plan to create Libra, the Bitcoin community is high on guard, looking out for any possible sign on how this will affect Bitcoin’s price.
Most crypto analysts point out that Libra could not have any effects whatsoever on Bitcoin, except perhaps to introduce the value of blockchain transfer to billions of potential users. The crypto community is positive that Libra, being unable to operate in a permissionless manner — the main selling point of cryptocurrencies—will remain nothing more but a variation of traditional payment systems and should not have major effects on the bitcoin market.
Women Population in the Crypto Market
The historical dominance of men in the scientific, financial, and technological industries can explain the lack of women in the cryptocurrency market. In these areas, women only account for 10-30% of the total workforce. As a matter of fact, up until 2018, the women population in the cryptocurrency was scarce if not absent at all. Take, for example, this one cryptocurrency conference held in Japan: out of 42 participants, there were only two women attendees.
In the past, women faced difficulties in finding jobs in blockchain startups. A study by LongHash in 2018 revealed that female workers in blockchain startups accounted only for 14.5% of the total number of employees.
But while the crypto market was originally perceived as an all-male industry, today, this is no longer the case. Results from a study by Bitcoin fund operator Grayscale revealed that 43% of respondents who are interested in Bitcoin investments are made up of women. And in India, for instance, women are investing more in cryptocurrencies than their male counterparts.
In the blockchain and crypto industry, there is also a growing number of women who are mastering new professions: analysts, investors, traders, developers, and even leaders of blockchain companies. Leading crypto companies Bancor and Binance are at the forefront by having 40-50% of women employees.
The attractive investment opportunities found in the crypto market is one of the major factors driving the growing interest of women toward cryptocurrency. In the past two years, the number of women in blockchain technology increased from 8% to 12%.
Women Employees in Blockchain Technology
Source: Coin Telegraph (2020)Created by CompareCamp.com
Scalability and Privacy Upgrades
Bitcoin rarely sees major upgrades happening in its network, and if there’s development at all in the Bitcoin protocol, any kind of progress seems to move at a snail’s pace, especially from an altcoin promoter’s perspective. Unlike a countless number of altcoins, Bitcoin developers are determined to preserve the system’s current state, even if it means pivoting away from advanced features.
While other altcoin communities have embraced technological developments in terms of smart contracts, anonymity, and cheap transactions, Bitcoin’s strong focus remains on the soundness and stability of the system. Often at the expense of privacy and cryptographic experimentation, Bitcoin upgrades are centered around optimizing network propagation and minimizing bandwidth, disk space, and CPU resource storage.
However, the tides have turned, and major changes are bound to stir things in the Bitcoin network.
Three new BIPs (Bitcoin Improvement Proposals)—Taproot, Schnorr, and Tapscript—are vying to be added in the Bitcoin core code. In definition, Taproot and Schnorr are soft-fork updates aiming to improve the scalability and privacy of the Bitcoin network. On the other hand, Tapscript is the scripting language used by Taproot scripts.
Currently, developers are in the final works of preparing the finalized proposal for the activation of Bitcoin’s soft-forking upgrade.
The Future of Bitcoin
Trading in Bitcoin or any other cryptocurrency has its ups and downs, as no one really knows where the market is headed in the coming years. Miners, investors, and traders continue to face the risk that comes with Bitcoin investments. For one, the finite amount of Bitcoins in regulation has resulted in more aggressive investments, and the mining process has become more difficult. Bitcoins are also extremely volatile, which means its value keeps spiraling up and down depending on the market.
However, it can’t be denied that Bitcoin has grown by leaps and bounds, with its value possibly conquering new heights as time passes. The trends above are proof that the public is becoming more interested in cryptocurrencies, and massive corporations are exploring new opportunities by investing more money and manpower in the crypto market.
- Bitcoin Halving History: Hash Rate as a Clue to What Will Happen
- The Main Risks of Investing in Bitcoin
- What is a Bitcoin Halving?
- Why The Bitcoin Price Could Hit $50,000 In 2020
- 37 Cryptocurrency Statistics
- How Many People Use Bitcoin
- Bitcoin’s Third Halving: Survey Shows 50% of Miners Expect a Price Increase
- 5 Major Bitcoin Trends to Watch in 2020
- Taproot & Schnorr: Scalability and Privacy Upgrades for Bitcoin
- The Bull Case for Bitcoin in 2020
- Women in Blockchain: Has Gender Distribution Come to the Crypto Market?