Bookmaker forecast: Bitcoin value to exceed 75 thousand US dollars by summer

In recent months, both in Latvia and elsewhere around the world, cryptocurrency and its value—which changes almost by the day—have become one of the most widely discussed topics. This is mainly due to Bitcoin’s impressive price increase: over less than a year, its value has risen tenfold, setting a new record last weekend and surpassing the 60 000 US dollar mark. Its value continues to fluctuate daily, and Betsafe bookmakers forecast that by the end of June, the price of Bitcoin could reach as much as 75 000 US dollars.

“If several years ago we explained the rise in cryptocurrency prices by the growing number of individual investors, it now appears that many reputable companies are also ready to join the ‘crypto boom’. This creates a greater sense of stability regarding short-term price fluctuations in the sector, offering hope for an increase in the currency’s value. The past year has proved to all of us how many unexpected turns can occur within a relatively short period of time. No one knows how this may be reflected in Bitcoin prices, but for now we are looking in an upward direction, with the development of the technology sector also playing a major role; alongside the digitalisation of various everyday processes, it has advanced particularly rapidly over the past year,” comments Valters Rozmanis, a Betsafe forecasting expert. 

This year, Bitcoin has continued its triumphant advance, with the cryptocurrency’s value nearly doubling since the beginning of the year. A major role in this process has been played by the US electric vehicle manufacturer Tesla Motors, which revealed on 8 February that it had purchased approximately 1.5 billion dollars’ worth of Bitcoin and was also considering accepting it as a means of payment for car purchases. A few days later, the card payment company MasterCard announced that its system would also enable payments in Bitcoin during the course of this year. Under the influence of these events, as well as fears of inflation, the cryptocurrency’s price rose by more than 30% in two weeks. It is also significant that the previous week Bitcoin’s total market value exceeded 1 trillion dollars.

However, this is by no means the first time that so-called institutional investors have recognised the potential of this cryptocurrency. For example, payments in Bitcoin became possible in the PayPal system in October last year, and many major investment funds have also purchased this particular cryptocurrency. Meanwhile, in 2014 airBaltic became the first airline in the world to accept Bitcoin as a means of payment for air tickets. Today, Bitcoin is undoubtedly the most controversial topic in the investment world. Some claim that it is the future of investment and payments, while others compare it with the mother of all financial bubbles—the so-called tulip mania in the Netherlands in the 17th century, which at the time caused the first global-scale economic crisis.

Meanwhile, the influential US investment bank J.P. Morgan has announced that the price of Bitcoin could reach as much as 150 000 US dollars as early as this year. By contrast, Michael Saylor, the head of the influential software manufacturer MicroStrategy, is even more optimistic—he believes that this cryptocurrency will become at least 12 times more expensive, surpassing the total value of all the world’s gold. At the same time, other experts in the investment world view Bitcoin critically. For example, the famous US investor Warren Buffett has repeatedly spoken harshly about this digital currency, calling it “essentially worthless”. “I can say with almost complete certainty that this cryptocurrency boom will end badly,” Buffett has said. Nobel Prize laureates and economists Robert Shiller and Oliver Hart have also joined him, describing the increase in Bitcoin’s value observed over the past year as a meaningless bubble.

As the price of Bitcoin has risen, it has also faced growing criticism from environmental activists around the world. The University of Cambridge has calculated that the equipment involved in mining this cryptocurrency consumes more energy over the course of a year than the Netherlands, a country with a population of 17 million. Nevertheless, despite the conflicting assessments, since its launch at the beginning of 2009 Bitcoin has been the world’s best-known and, in terms of market capitalisation, largest of the approximately 1,000 cryptocurrencies, or virtual currencies, whose initial value was just 0.0008 US dollars. Bitcoin is widely known for its dramatic fluctuations in value, experiencing several very rapid rises as well as pronounced declines during its 12 years of existence. As recently as 2017, the price of this cryptocurrency more than doubled rapidly, but within the following six months it lost 80% of its value.