Bitcoin has had a wild run in 2021. The cryptocurrency’s value managed to double in fewer than four months before giving up a significant chunk of its gains. With all the ups and downs, investors interested in the volatile asset class might be wondering how high Bitcoin could go in 2021.
After surging for several months, the world’s most popular cryptocurrency went through a selloff frenzy in April and May. The selloff could be attributed to various factors, including tweets from Elon Musk, Bitcoin’s most prominent proponent, and the potential crackdown on cryptocurrencies implied by Chinese authorities.
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Bitcoin’s recent rise
After hitting a low of US$35,000 on June 8, 2021, Bitcoin began recovering. The cryptocurrency crossed the US$40,000 mark again on June 14, 2021, as Musk reiterated his support for the cryptocurrency in a tweet on June 13. Elon Musk said that Tesla would resume Bitcoin payments, provided that cryptocurrency mining operations become greener.
Bitcoin is going through another pullback of late. The cryptocurrency is worth US$37,670 at writing on June 18, 2021, and thus far, the reasons for this pullback are unclear.
How high could Bitcoin prices go this year?
The inexplicable volatility in the cryptocurrency world makes it challenging for anyone to predict how high Bitcoin could go in 2021. With many crypto bulls convinced that it could reach the fabled US$100,000 mark, there are several reasons why it could continue a downward trend.
The concerns about regulatory crackdowns and energy consumption by mining operations are not pointing in favour of Bitcoin reaching the US$100,000 mark anytime soon. Elon Musk’s tweet regarding Tesla’s U-turn on accepting Bitcoin payments is contingent on better energy usage. He stated that the company will start transacting in Bitcoin when there is a confirmation of reasonable clean energy use by miners with a positive future trend.
For now, Bitcoin seems like it might hover around the US$37,000 region, and its volatility might send it up or down by a few thousand dollars.
Foolish takeaway
HIVE Blockchain Technologies (TSX: HIVE) might present itself as a better alternative to gain exposure to cryptocurrencies than buying Bitcoin. The cryptocurrency mining company is one of the best in the industry, operating in some of the coldest environments to keep energy consumption costs low. The company’s focus on using renewable energy makes it a step above many other companies in the cryptocurrency mining space.
However, any weakness in the cryptocurrency space will have an impact on HIVE. The mining company has been in a state of limbo due to the volatility in cryptocurrency prices. Given the concerns regarding the nature of energy use to mine cryptocurrencies, HIVE Blockchain Technologies might have lower downside potential than Bitcoin itself.
While HIVE stock could be a safer bet than Bitcoin, I would consider looking for other avenues to explore instead of the cryptocurrency space for wealth growth. If you are bullish on cryptocurrencies, HIVE stock could be a much better investment than Bitcoin.
