Bitcoin Price Analysis
Bitcoin was the world first successful Cryptocurrency, it launched in 2009 after the publication of a white paper on the concept the previous year. New Bitcoins must be mined by solving complex mathematical problems or hashes on the Bitcoin Blockchain, an immutable distributed ledger, accessed by all parties involved in physical Bitcoin transactions. The supply of Bitcoin is strictly limited to just 21 million coins, of which some 18.70 million have been mined so far.
What is the Bitcoin Price?
The Bitcoin price is currently US$55,710.00, giving Bitcoin a market cap of just over US$1.0 trillion. The current price is -9.10% below the recent and all-time high and almost +90% above the yearly low, posted in March 2020.
Bitcoin Price Forecast
Bitcoin is not currently researched in the same way that stocks and shares are and so price forecasts are not commonly available. That said there are futures markets for Bitcoins and other cryptocurrencies and these provide a guide to the market’s expectations for Bitcoin’s price performance ahead. The longest dated contract currently available on the CME is for December 2022 and Bitcoins for this delivery are priced at US$66,730.00 per coin. By contrast, the December 2021 contracts are trading at $63,830.00.
Bitcoin US Dollar Price BTCUSD
As a digital currency Bitcoins price can be expressed against fiat or paper currencies aside from the US dollar.
It’s also not uncommon for the price of Bitcoin to be expressed in other cryptocurrencies, for example, one Bitcoin is currently worth 30.97 Ethereum or ETH.
Bitcoin Euro Price BTCEUR
In Euro terms, Bitcoin is currently trading at €46,565 Bitcoin has gained +829% against the euro over the last 52 weeks and year to date it’s up by almost +96% there have also been 52 new highs for the Bitcoin price in euros in the last 6 months that was period when the Euro was still making against the US dollar.
Bitcoin Pound Sterling Price BTCGBP
Looking at Bitcoin priced in sterling, Bitcoin is worth £39,930.00 per coin. The cryptocurrency has made 58 new highs against the UK currency in the last 6 months during which time its made gains of 370%. As with the gains made against the Euro, this gans versus the pound came in a period when sterling was rallying against the US currency.
Bitcoin Price Technical Analysis
Bitcoin remains in a longterm uptrend though the price has fallen back from recent all-time highs. As a tradable financial instrument, the market in Bitcoin is still evolving and trading volume is spread across a number of competing exchanges as such its price is subject to considerable price volatility.
Near-term support levels can be found at US$55,200, $52,500 and $47,350. Resistance shows its hand at $58,120 and $58,330. RSI 14 for Bitcoin would hit the overbought reading of 70 at a price of US$60,616.
Bitcoin Price Dividends
Bitcoin does not pay dividends, nor does it receive interest in the way that other currencies do, when they are left on deposit. In this regard, Bitcoin is closer to precious metals, than cash, but just like gold, silver and platinum, Bitcoin can be used as a form of money or method of payment.
Bitcoin Price Chart
The 20 day MA line (drawn in green) has generally been supportive of Bitcoin’s price over the last quarter, recent price action in Bitcoin has been driven by momentum, and the cryptocurrency has posted 20 new highs over the last three months, and 63 new peaks in the last 52 weeks. Compared to just one new low in that same timeframe.
What Moves The Bitcoin Price?
- Supply and demand - Unlike many other financial instruments the supply of Bitcoin is finite and by and large the price of Bitcoin has been rising over time as more of the 21 million coins come into circulation this reducing future supplies.
- Safehaven and alternative investment flows - Bitcoin is seen as a store of value and hedge against inflation given its unique status its also viewed as a non-correlated investment. All three characteristics attract money into Bitcoin when traditional markets are risk-off.
- Awakening institutional interest - Until recently the majority of interest in Bitcoin has been from retail traders or HNWI from the worlds of technology and computing. However, that is definitely changing as corporates and financial institutions are becoming increasingly involved.
- New Bitcoin-related ETPs - Many would-be Bitcoin investors have been put off of dealing in Bitcoin by issues around security and safe storage. That has created an opportunity for Exchange Traded Products or ETPs, linked to Bitcoin, but which trade in the same way as stocks shares. Each new ETP creates additional demand for Bitcoin trading.
- Investor sentiment and social media comments - Bitcoin remains very sentiment-driven and comments by so-called influencers on social media can dramatically affect the coins price both positively and negatively. Particularly as many Bitcoin traders are also very active on Social Media Networks and Chat apps.
Bitcoin Price History
Bitcoin’s price history is unique: it was effectively worthless in year one and in May 2010 10,000 Bitcoin were used to pay for two takeaway pizzas. However, by February 2011 Bitcoin had reached US$1.00 per coin and in May 2017 the price had reached US$2000.00.
It would go on to trade at $17,900 dollars on December 17th that year. However, within a week it had traded back to $13,800 and it fell to just $6,200 in early February 2018 from where it effectively halved to $3,300 dollars by December 2018. Since when the price has been appreciating though rarely in a straight line.
Should you buy Bitcoin?
Many investors are asking themselves this question, the answer to which will largely depend on your attitude towards cryptocurrencies in general. Institutional investors and professional money managers are getting involved and the interest in and growth of ETPs linked to Bitcoin are testament to that.
Some small allocation to the cryptocurrency space seems to make sense given that central banks are exploring how they might use digital currencies in the future. However owning physical Bitcoin, with all the connotations about security and storage, maybe a step too far for many investors, and they may choose to gain exposure to the space through quoted Bitcoin Miners or investment vehicles. Clearly, though, any money invested in cryptocurrencies should only ever be risk capital.
Darren is a veteran of the financial markets with almost 36 years of experience under his belt. He has worked in trading, sales, analytical, and research roles, he has been a regular guest & commentator on financial television channels and publications. During his career, Darren has been fortunate to act for and advise major hedge funds and investment banks as well as HNWI. Darren analyses the markets using a blend of technical and fundamental analysis