Cryptocurrency bulls are likely rejoicing today! Why? Well, after nearly three years, bitcoin (CCC:BTC) surged on Monday to hit a new all-time high above $19,800. With this record in the rear-view mirror, what do analysts have in terms of bitcoin price predictions for 2021?
To start, investors should know about the new record high for bitcoin. After hitting $19,783 in December 2017, the leading crypto had dipped lower. However, recent weeks have seen bitcoin continue to climb higher, knocking out threshold after threshold. Then, this morning, a new all-time high finally arrived. Bitcoin reached as high as $19,850.11 before turning lower. Importantly, many crypto experts think that this long-awaited record will reaffirm the macroeconomic picture for cryptocurrencies and help boost bitcoin price predictions for 2021.
Beyond the new all-time high, a lot has been working in favor of cryptos. PayPal (NASDAQ:PYPL) and Square (NYSE:SQ) now offer customers options to buy and sell bitcoin, and as of October, Square said it had $50 million worth of the crypto. Additionally, concerns over novel coronavirus stimulus plans from Congress and the Federal Reserve have sparked inflation fears. These fears too support bitcoin and its cryptocurrency peers.
With that backdrop, we have seen a handful of new bitcoin price predictions for 2021. Earlier in November, Citibank analyst Tom Fitzpatrick wrote a note detailing how bitcoin could hit $318,000 by the end of 2021. Today, BTIG analysts threw their hat in the ring. In a new report, the firm set a $50,000 price target for bitcoin by the end of 2020. Analysts cited institutional support, the pandemic and its upward trajectory as sources of support for the move.
How to Play Bitcoin Price Predictions
So what should you do now that bitcoin has set a new all-time high and looks likely to keep climbing higher? Well, there is reason to dive in. However, there are other alternatives that look increasingly popular heading into 2020 and beyond.
As Jesse Pound wrote for CNBC, the growing availability of bitcoin on Square and PayPal make those two stocks appealing here (subscription required). Additionally, CME Group (NASDAQ:CME), the exchange that facilitates bitcoin futures contracts, is another derivative play. Want one more? Pound recommends the Grayscale Bitcoin Trust (OTCMKTS:GBTC), which is similar to an exchange-traded fund and invests exclusively in bitcoin.
Regardless of how you choose to pursue the record rise in bitcoin, it looks likely that you will find success here. With the upcoming inauguration of President-elect Joe Biden, all signs point to more monetary and fiscal policy that will support individuals in the fight against the novel coronavirus. That policy should further raise inflationary fears, and lead to even more bullish bitcoin price predictions.
Pay close attention to the digital gold here.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer for InvestorPlace.com.