A recent take from NPR titled “Bitcoin: Mother Of All Bubbles, Or Revolutionary Breakthrough” takes a look at a variety of opinions on the bear and bull sides of the Bitcoin equation.
Robert Testagrossa sees Bitcoin as a valuable short and long-term asset that will accumulate substantial price gains in 2021 and in the years ahead. Here are some of the core reasons for this optimism:
Blockchain’s Disruptive Promise
The Bitcoin story continues to shift over time. It’s no longer a novelty or fad, but a part of the financial ecosystem. Big fintech players and banks are increasing their Bitcoin investments. There’s a broader acceptance for the cryptocurrency as both a payment method and a longer-term way to preserve capital.
There’s also an attractive narrative about Bitcoin and the underlying blockchain apparatus. It involves unbreakable cryptography and secure transactions. It’s decentralized and removed from the powerful banking institutions. There’s still enthusiasm about Bitcoin and the ways blockchain-powered tools can transform various industries. In the early days of its existence, many people did not see Blockchain emerging as a transformative force, but many of these now strongly regret not getting in on the ground floor.
Deflationary Pricing and other Motivations
Bitcoin is inherently deflationary because the supply is fixed and immutable. Only 21 million Bitcoin will ever exist. Yet in fact the supply shrinks a little each year as some Bitcoins are lost in wallets where the user misplaces or inadvertently destroys the key, or simply forgets their password. Compared to countries of the world that engage in “quantitative easing” to print money and keep the pandemic depression at bay, Bitcoin is incapable of succumbing to inflationary pressures. These global inflation moves for fiat currencies will continue in 2021 and the coming years, which then increases the value of Bitcoin which moves inversely to inflation. In the short to near term this means we will likely see $100,000 or higher Bitcoin pricing as demand continues to rise and the supply remains static.
Bitcoin is also removed from political control at an important moment in history where many of us don’t trust our governments’ motivations. There’s no “central bank” or regulatory body that controls Bitcoin. Organizations like the U.S. Treasury can impart country-specific rules for how Bitcoin is taxed and managed, but they don’t control the actual currency. It’s a border-less construct. And it’s gaining popularity fast, from small investors using Coinbase to the big players, Bitcoin’s here to stay.
Robert Testagrossa on Bitcoin’s Prospects for 2021 and Beyond