The price of Bitcoin continues to steadily rise ever since the halving event took place on May 11, 2020. Given the price hit rock bottom at $3,100 USD at the beginning of the coronavirus pandemic, the fact Bitcoin is now flirting with the $10,000 mark means investors with good timing have already tripled their investment in just a few months.
Even with all the optimism surrounding Bitcoin and all of the altcoins rising in value alongside it, it seems every time digital gold gets close to $10,000, bearish traders push the price back down. Still, it’s time to consider an important question: is $10,000 going to be the new floor for Bitcoin anytime soon? Let’s discuss.
What The Market Needs to See to Justify a $10,000 Floor
The fact Bitcoin is even flirting with the $10,000-mark right now is a mini miracle considering what happens to the price during the coronavirus pandemic. That being said, there are many things the market needs to see before anybody will justify $10,000 as the new floor, as the new minimum price that we will never be breached again.
Consider for a moment the difference between the $3,100 and $10,000 price swing occurring in 2020 so far. Now think about the fact that in December 2017, Bitcoin’s all-time price high saw the currency flirt with the $20,000 mark.
Now that the third Bitcoin halving event has come and gone, many experts believe the $20,000 mark is well within range to be surpassed again by the end of the year. But there are also reasons to consider that the price just may plummet.
Crossing the $10,000 mark temporarily simply isn’t enough. From a fundamental standpoint, the decrease in the number of new bitcoins entering circulation thanks to the most recent halving event essentially makes it 50% less profitable to stay in the crypto mining business. This means that smaller mining companies are going to get swallowed up by bigger ones. A consolidation of that sort effectively centralizes control, and dampens Bitcoin’s ultimate purpose. To make exchanging value democratic for everyone. It also means your computers supporting the network and perhaps a lower price.
More Institutional Uptake
The effect of smaller crypto mining companies likely leaving the industry altogether might just mean that the Bitcoin price needs larger institutional investment in order to stabilize above $10,000. Recent news suggests that even institutions previously bearish on Bitcoin are starting to take it seriously as a way of hedging the market and also as a means of protecting their existing business models.
One such example is J.P. Morgan. CEO Jamie Dimon was very outspoken about the fact that Bitcoin’s price rise in 2017 was nothing more than a speculative bubble and that the cryptocurrency has almost no intrinsic value. Yet more recently, the bank appears to be calling it legitimate and it’s almost undeniable that at some point, any major bank that feels threatened by digital currencies will have no choice but to buy into the industry.
Since such banks have access to large volumes of liquidity, it would make sense to go big on digital currencies and take advantage of any opportunity there is to profit.
Although most governments, banks and major investing companies seem more than happy to come up with their own digital currencies as a way of trying to convince consumers that their digital token is as good as Bitcoin or any other truly decentralized currency, the truth is all of those constituents will eventually have to buy into blockchains not owned by anyone. Consumers smart enough to see this need to get in now.
What Gamblers Can Do to Prop up Bitcoin’s Floor
While the average crypto gambler probably isn’t a whale with millions of dollars, there is one way the gambling community can help prop up the prices of digital currencies. That is to be at the tables in place wagers. Millions of dollars’ worth of gambling transactions are exchanged daily on the Bitcoin network, and other blockchains like Ethereum and Tron to name a few.
With prices appreciating the way they are, there’s no better time than now to hit the tables. Even gamblers who lose on a wager should be able to win long term with price appreciation as long as the good old-fashioned bankroll stays intact.