Bitcoin, fresh from one of its brief history's wildest years, has unexpectedly soared higher again, bursting through the $30,000 per bitcoin psychological level and raising the overall value of bitcoin past $600 billion.
In the first two days of 2021 alone, the bitcoin price rose almost 10 percent, placing it in the polling position to become one of the best performing assets of the year and helping it overtake the payment giant Visa's market capitalization.
Now, with the recent price rise cheered by the bitcoin and cryptocurrency community, investors are still wondering how far the rally will run, and whether bitcoin will soon surpass Tesla TSLA, Facebook, Microsoft MSFT, Google GOOG and Apple AAPL, the six U.S. firms worth more than $600 billion.
"Marc Bernegger, bitcoin pioneer and member of the Board of Crypto Finance Group, said via email, "The dramatic price rise of bitcoin since Christmas could be just the beginning of the next upward trend for digital assets. "Compared to the past, there are more and more institutional investors who look at bitcoin as a new and emerging asset class, not mainly retail investors buying into digital assets."
Since December 25, the bitcoin price has added 20 percent, leading to gains for 2020 of over 300 percent. The Bitcoin boom was triggered by PayPal PYPL announcing its bitcoin support in October and backed by a surge of institutional investment, taking it far and away past its 2017 peak of about $20,000 per bitcoin.
With bitcoin passing Visa's $511 billion market cap this week, the surge has brought the total market value of all the bitcoin tokens in circulation from under $200 billion in October to over $600 billion now.
Bitcoin is now expected to surpass the $668 billion valuation of Elon Musk's electric car company Tesla, while Tesla has seen its value grow at a rate comparable to bitcoin in recent months as investors have poured into the stock before it was integrated into the S&P 500.
The price of bitcoin will have to increase to $36,000 for the total amount of bitcoin to top the current market cap of Tesla, something that many in the bitcoin and cryptocurrency community expect to happen sooner rather than later.
The founder of the crypto data company Messari, Ryan Selkis, pointed to his October estimate that bitcoin would be worth $150,000 per token by the end of 2021 when asked about the prospects of bitcoin.
That would give Bitcoin a market cap of $2.7 trillion, outstripping $778 billion from Facebook, $1.1 trillion from Google, $1.6 trillion from Amazon's AMZN, $1.7 trillion from Microsoft and $2.3 trillion from Apple.
"My view is that this decade, one bitcoin will be worth more than $1 million," Cory Klippsten, chief executive of Swan Bitcoin's bitcoin-buying app, said via Telegram. "However, I have no idea the path it will take to reach that level, and I would warn you not to listen to anyone who says they do."
If bitcoin finally hits a price per bitcoin of $1 million, the total value of bitcoin will be over $18 trillion.
Selkis urged potential investors, however, to "have a plan and stick to it because otherwise your feelings will take over" if the price of bitcoin unexpectedly falls lower.
The price of bitcoin is extremely volatile and double-digit percentages have been recorded to swing in mere minutes. In March, in the midst of the wider coronavirus sell-off, the bitcoin price plummeted to under $4,000 per bitcoin before quickly rebounding.
While many investors in bitcoin and crypto expect to see a correction in the near future, most are largely upbeat going through 2021.
"I would not be surprised to see a healthy short-term correction after reaching several new all-time highs in just a few days, but I am still quite positive for the mid-term and particularly long-term because of the massive demand from professional and non-speculative oriented investors," Bernegger added.
Klippsten also warned potential investors before jumping into the bitcoin market to do their homework.
"Bitcoin is no different, as always, you're better off investing in the things you know," said Klippsten, who used Swan Bitcoin to raise awareness about how the cryptocurrency functions.
The amount of value people want to store is normally associated with their perception of bitcoin in the bitcoin protocol. You are much more likely to buy high and sell low if you buy a ton of anything you do not understand. So, as part of your education process, think about buying some bitcoin rather than putting a trade in the hope of fast benefit.
I think ypu have a huge gain in this bull run