How High Could Bitcoin Prices Go?
Bitcoin Breaks Through $1,000
Bitcoin is the latest rage. You can’t go very far without hearing or reading something about how the virtual currency is increasing in value, and investors are excited about its growing popularity.
But how far will it go? Will it stabilize or decline? This is something you need to consider before you step foot into the Bitcoin investment world.
The one thing that's giving investors pause is that Bitcoin is heavily volatile. Several weeks ago, it was going down, but just a short time later, it broke through record highs.
Why? People are starting to learn more about it and are jumping on board. It’s anonymous, which means it’s untraceable. On top of that, it’s not taxed, making it even more attractive. People love that it’s not controlled by any central bank or governing body.
Because of this, however, its value is determined by demand. The people that are taking it as a form of currency are the ones raising its value. As soon as people lose interest in Bitcoin, it will drop.
Henry Blodget from Yahoo! Finance says that it may hit a million, but don’t get too excited just yet. A drop is probable; Bitcoin a bubble that will likely burst somewhere down the line. But this isn't likely to happen for a while because of the excitement that continues to surround it.
Yet this is all just speculation – there’s no way to tell how far it will go. And there’s some hope that it will become quite valuable, especially since the Chicago Federal Reserve recently told the Guardian:
“[Bitcoin is] a remarkable conceptual and technical achievement, which may well be used by existing financial institutions (which could issue their own bitcoins) or even by government themselves.”
If there ends up being more interest by banks and governments, it’s likely that Bitcoin will continue to increase in value. But if it loses that luster of being “by the people, for the people,” Bitcoin users will turn away.
Some believe the eurozone crisis could be helped greatly by Bitcoin because it brings in wealth that is only exchanged on merchants’ desire to accept it. Instead of depending on the value of the euro, people start to depend on a different type of currency that isn’t regulated by the central banks.
So what does this all mean to you?
Bitcoin is volatile, and it’s a risk for investors – particularly now, when the price has surged past $1,000. You need to want to gamble if you're going to invest in Bitcoin. But like any gamble, there's a chance it could pay off handsomely.
If Bitcoin interests you, get started now. There’s a limited supply of 21 million, and about 50% of them have already been mined.
People all around the world are getting into the currency. Approximately 50,000 people in India are investing in Bitcoin, according to the Economic Times, and that number will surely continue to increase for that country and others.
This is especially true as more online merchants start to accept them, as they will. Just last week, there was a huge frenzy with Bitcoin Black Friday. A website listed all of the e-tailers accepting Bitcoins, and people were ecstatic.
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This may be why Bitcoin hit an all-time high of $1,242 on November 29th. If your eyes just widened, you’re not the only one. Bitcoin almost hit the price of gold!
It’s decreased to around $1,000 since then, but that’s not bad. It’s probable the price will continue to increase closer to Christmastime. People may even be tempted to give Bitcoin as a gift.
After Christmas, however, Bitcoin may decrease – probably not all the way to the $13 it saw last January, but much lower than it is now.
This means you have two options with Bitcoins:
You can buy into it now to gain on the latest excitement surrounding it.
You can wait until after the holiday season, banking on a lower price, and then hold onto it as the value increases over time.
Keep in mind that jumping on Bitcoin now will mean you are getting into it high, which isn’t always the best investment strategy. And remember that the value of Bitcoin depends on people’s use of it and how much is available.
As more of it is mined, there will be a greater supply, but the demand will be increasing faster. At its current price, Bitcoin may be more of a long term investment. Think about how you want to make money from Bitcoin, do your due diligence, and then invest accordingly.
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