Bitcoin has seen a stunning rise in price in 2020, and this has continued into 2021 as well, with the price of just one token of Bitcoin crossing $33,000 earlier this month. This has followed a rise of over 300% in 2020, and even higher if you consider the lowest point that the price reached last year, which was around $5,300 in March. It is perhaps no surprise then that there has been a lot of renewed interest in Bitcoin, as well as the cryptocurrency space in general, due to this. Many people who had previously shown interest, but were scared away from the market due to the huge crash that occurred in 2018, are now being drawn back to this market due to this unbelievable price surge, and the Australian market is just one such area.
Various crypto exchanges in Australia have told stories of how they did not have any time off during the Christmas festive period, since they had to keep up with a huge rush of customers looking to invest and trade in bitcoin. There are apparently thousands of new Australian investors into bitcoin daily, which is unprecedented for any asset, and shows how bitcoin has managed to capture the attention of people all over the world. One trading house has stated that they brought on 40% more customers in the second half of 2020 than they did in the first half, while they have already added 16% of 2020’s total new customers in just the first six days of 2021. This can, however, bring a sense of deja vu to many people, since it was a similar story in 2017, when Bitcoin went on a similar price run and sparked a similar wave of investment, but many of the buyers who got in late suffered when the price tanked in 2018. However, according to many people in the crypto community, even though the rise looks similar, the reasons behind it are different, and therefore the likelihood of a similar crash is much lower.
One of the reasons that people give for this is the fact that the market is more sophisticated now, both in terms of the product as well as the investors, while this time around, big institutional investors are also piling on, which wasn’t the case in 2017. For example, the digital payments platform Square bought around 4,700 Bitcoin in October, while PayPal announced that it would soon allow its customer base of nearly 350 million people to begin holding and using cryptocurrencies as part of their PayPal balances. There are various other sectors which are also showing interest in cryptocurrencies, of which one of the most interesting is the online gambling industry. Many online casinos offer players the opportunity now to make deposits and withdraw earnings in cryptocurrencies, as well as playing ethereum blackjack, which is a crypto alternative of blackjack, in that players can place bets using crypto instead of regular money. This has proven to be immensely popular with both crypto users as well as regular online gamblers, and is just another reason for the growing popularity of cryptocurrencies, whether in Australia or elsewhere.
Another factor is that crypto is also being adopted a lot more by older people. One of the Australian exchanges stated that the share of its user base that is above 60 years in age has gone up from 5% to 9%, as the older generation looks to get in on this increase in value for their portfolios. Thus, we can expect to see crypto stick around for some time, and also continue to grow in value, with Bitcoin predicted to hit $100,000 in the near future.
