2021: The Big Time to Invest in Bitcoin?

Is it a good idea to invest in Bitcoin today, in the middle of 2021? As of the writing of this article, the dominant cryptocurrency is trading around $ 50,000, which makes many investors believe that it is too late to buy Bitcoin. 

With Bitcoin trading around $ 50,000, many readers wonder: Is it worth investing with Bitcoin at this price? 

The quick answer to this question is: Yes, you are on time. We don’t think you’re late for the party. 

Price of Bitcoin Analysis: 

According to JP Morgan analysts, the price of Bitcoin will skyrocket in the medium term to reach an estimated figure of $ 146,000, while the same investment firm believes it will reach $ 650,000 by the end of 2022. 

If we look at the mathematical models that seek – and succeed – to forecast the price of Bitcoin, the Stock to Flow (S2F, hereinafter) model stands out. This mathematical model was created by a Dutch institutional investor, whose identity has not transpired, with training in the field of quantitative finance. Until now, the S2F model has managed to forecast all the movements of Bitcoin with amazing accuracy and claims that its price will reach $ 288,000 in the current growth cycle ( reaching one million dollars in 2024). In a few paragraphs, we will tell you all the details of this surprising predictive mathematical model, which until now has been accurate as clockwork. 

Bitcoin was created by a mathematician (or group of experts in mathematics and cryptography) calling themself Satoshi Nakamoto. Although the real identity of this person or group of people is unknown, it is believed that Bitcoin was created to:

1. Create an autonomous digital monetary system that does not depend on third parties or intermediaries. 
2. Set up as a monetary alternative that cannot be manipulated or controlled by governments and central banks. 
3. Be a deflationary alternative in response to government inflationary policies (we will go into detail on this later). 
4. Create a method for creating, storing, and transmitting wealth that is not alterable, unforgeable, decentralized, and impossible to requisition. 

As we see what Bitcoin proposes is a paradigm shift: Until now we have relied on governments and central banks to manage, support, and manipulate the world monetary system; Bitcoin dispossesses these actors of such power. 

Is 2021 the great time to invest in Bitcoin? 

 Something of great interest that we take from analyzing Bitcoin’s growth cycles in perspective is that the current moment in which we find ourselves (indicated by the red marker in the image above) is an exceptionally good time to invest in Bitcoin. 

First, we are at the beginning of Bitcoin’s fourth growth cycle, at the beginning of a confirmed uptrend. However, according to projections we still have a lot of growth ahead to reach the $ 200,000 projected for this cycle. 

Second, in the correction that will occur at the end of this cycle, the price of Bitcoin is not expected to fall back to current levels. That is to say: We may never again have the opportunity to buy Bitcoins at a price located around $ 50,000. 

Forecasts and predictive models of Bitcoin

At this point, you probably want to find out more about the predictive models that project the price of Bitcoin up to the levels that we have discussed a few paragraphs above. 

The Stock To Flow Mathematical Model

As we mentioned in the introduction, the best known and most respected model for the accuracy it has shown is the Stock to Flow (S2F, hereinafter). It is an adaptation of pre-existing models used to predict the price of raw materials such as gold, silver, or palladium, all of them – including Bitcoin – with one peculiarity in common: they have a limited amount of supply. 

As you will remember, the maximum number of Bitcoins that can be mined is 21 million, and at present 18.5 million of that total have already been “released”. It is clear that if demand continues to increase as it has done up to now, supply will not be enough to meet it. By the law of supply and demand, the only solution to this equation is for the price to grow to the levels posed by the S2F model.

The S2F model is much more complex than what we have described here, since it takes into account other intrinsic variables in Bitcoin, such as halvings, Bitcoins that have been lost, the cryptocurrencies that are available in circulation, phase changes, and Bitcoin clusters… However, it is too complex a mathematical model to cover in detail in this article. 

Since the anonymous institutional investor known as PlanB published this mathematical model a couple of years ago, the price of Bitcoin has continued to grow following the proposed pattern with astonishing accuracy. In fact, due to the accuracy of this model, the S2F is considered to be the most accurate predictive model we have for predicting the price of Bitcoin. 

The most relevant thing about this model is that it considers that in the fifth growth cycle of Bitcoin it will reach an estimated price of $ 288,000, while in the medium term (in 2026, approximately) it could exceed $ 1,000,000. 

The forecasts of the large investment banks and financial analysts

The S2F model might not have much relevance in isolation if it weren’t for the fact that analysts from large investment funds agree, totally or partially, in their predictions about the price of Bitcoin. 

The renowned investment bank JP Morgan published its estimates on the price of Bitcoin this past January, placing it in the medium term above $ 146,000, “because Bitcoin already competes with gold”. 

The same financial analysts of the American firm said a few days later that, as soon as Bitcoin manages to overcome the barrier of $ 40,000, “it is very unlikely that it will fall below those levels again”. 

Along the same lines, at the end of 2020 an internal document from the Wall Street giant Citibank was leaked, in which its analysts estimated that Bitcoin could reach $ 300,000 by the end of 2021, and called the dominant cryptocurrency “the gold of the century. XXI “. 

In these paragraphs, we have synthesized some of the most popular and relevant forecasts for anyone who wants to invest in Bitcoin. However, we could go on to list many more. The important thing in this sense is to understand that in the financial world there is consensus on one aspect: Bitcoin will continue to grow by leaps and bounds and exponential; This has only started.  

Adoption of Bitcoin by institutions: 

A few years ago, there was a lot of talk that when institutions (large banks, corporations, companies, and government entities) adopted Bitcoin, there would be a point of no return in their growth. 

While we were writing this article, the news was made public that Tesla had bought $ 1.5 trillion in Bitcoin and that Elon Musk’s company was going to allow its customers to pay with this dominant cryptocurrency. This news has propelled the price of Bitcoin to $ 48.0000, a turning point that will most likely cause us to never see Bitcoin below $ 40.0000 again.

Tesla has not been the first, other companies such as Microstrategy, Square, or Paypal have been buying Bitcoins in bulk for months and trying not to make too much noise. 

Large investment funds and institutional investors such as Grayscale, Morgan Stanley, ARK Investments, or Rothschild Investment own Bitcoin, directly or indirectly. As reported by Bloomberg a year ago, almost 40% of banking institutions in the US and Europe already own Bitcoin or derivative products. (At present, likely, this percentage has already exceeded 50%). In the US even retirement pension funds are starting to buy Bitcoin. 

All of the Bitcoin buyers we have listed (and many others we have not mentioned) have been buying Bitcoin above the available supply for months. There is not Bitcoin for everyone, and the way that the market has to regulate the lack of supply and excess demand is by increasing prices continuously and steadily.  

The massive irruption of institutional investors brings countless benefits to the Bitcoin ecosystem. In the first place, it acts by stabilizing the system, reducing volatility (sudden price changes), while promoting continuous growth in the price of the dominant cryptocurrency. 

In short, the institutional irruption in Bitcoin has made the market mature by leaps and bounds. Gone are those days when Bitcoin could fall 40% in hours due to the weakness of a market mainly made up of retail investors. Institutional investors are “strong hands”, they buy to hold and are not guided by cycles or specific news. 

Institutional breakthrough is synonymous with stability, growth, and maturation. 

The advantages of investing in Bitcoin in 2021

      At this point in the article, you are probably already aware that we are experiencing a paradigm shift, a historical moment. We do not doubt that in the not too distant future, society will be divided between those who own Bitcoin and those who do not have such privilege.

In summary, we would like to summarize the advantages that Bitcoin can offer us in the middle of 2021

1. Invest in Bitcoin for Potentially Unmatched Returns

According to the mathematical models and forecasts that we have seen in this article, the price of Bitcoin will be above six figures in the short term, while in the medium term we can expect it to exceed a quarter of a million dollars. 

We are talking about potential returns in the medium term located between 150% and 500%. 

We are talking about history: Bitcoin has been for years, most likely, the most profitable investment that we have had at our disposal. Bitcoin has given a return of + 1,187% in the last 2 years. In the last 5, + 10,536% (yes, ten thousand percent). In the month and a half that we have been in 2021, Bitcoin has already given a return of more than + 60%. 

Those who right now believe that it is too late to invest in Bitcoin, imagine what they will think when its price exceeds a quarter of a million dollars. 

2.To protect your wealth from inflation and unlimited money printing, invest in Bitcoin

In recent months we have been able to witness how the US Federal Reserve and the European Central Bank launched experimental monetary policies based on quantitative easing.

To get out of the economic crisis caused by COVID-19, Western central banks that control the euro and the dollar decided to print more money.

This solution was highly criticized by large sectors of society which has begun to devalue the price of the dollar and the euro and is putting economies in danger of hyperinflation.

In the US, 35% of all dollars in circulation have been printed in the last 10 months. The Federal Reserve printed more banknotes in a single month than in 2 entire centuries.

Faced with this unprecedented manipulation by Western governments and central banks, investing in Bitcoin is not emerging as a possibility; it is imperative to protect our purchasing power and grow our wealth.

3.   Invest in Bitcoin to embrace the future 

For many, investing in Bitcoin has a clear ideological component: it means embracing the paradigm shift that we are experiencing, it means repudiating the current monetary system manipulated and controlled by the powerful to evolve towards a more just, fair, unmanipulable monetary and reserve system of value. 

Investing in Bitcoin today also represents being part of a minority of early adopters. Although it may seem that Bitcoin has already penetrated intensively in society, we are still at a relatively early stage; It may seem like it is late, but a look with perspective shows us otherwise. 

And as with other advancements in the past, early adopters tend to benefit from pioneering by embracing new technology. 

As of the writing of this article, it is estimated that 100 million people own Bitcoin, which represents only 1.32% of humanity. It is estimated that only 0.01% of humanity owns more than 1 BTC.

It seems plausible to think that in the not too distant future, society will be divided between two types of individuals: Those who have been able to accumulate considerable amounts of Bitcoin, and those who have not.

Bitcoin may represent an unparalleled wealth redistribution opportunity – but only for those who are willing to pay attention to it and determined to make the move. Elon Musk, one of today’s most privileged and visionary minds, seems to have caught on just in time.