The most notable drivers behind Bitcoin’s ride above the level of $20,000 are the new COVID-19 pandemic and the motive force of the trend. Additionally adding to it was the US presidential elections that ended with Joe Biden’s victory.

Let’s take a closer look at all of these, starting with COVID-19.

The first coronavirus wave back in the spring of 2020 already threw the world into chaos, and the second one made the inflicted damage that much worse to deal with. Economies have been shutting down again since September 2020, requiring further stimulus from central monetary authorities in different countries. This once again led to a rise in inflationary risks for several major fiat currencies and the risk of a worldwide economic recession becoming even deeper. All these risks present a serious threat to investors who allocate their funds in fiat currencies. 

But, amidst the grim economic situation, a glimmer of hope showed itself in Bitcoin, whose supply is strictly regulated and limited. Many companies and high-net-worth investors came to see it as a great way to hedge against inflation. Thus, their demand for BTC went up and, as a consequence, became a major driver in the crypt’s rise in price over the recent months.

Next let’s look at the trends and how they influence the situation.

The motive force of the trend has been another key factor in the continuous upwards movement in the Bitcoin’s price. As the trend was going up, it grew stronger, creating a situation where money was making money. As there weren't any strong resistance levels from the 2019 peak at $13,949 up to the historical high of 2017, it is no surprise that the price was able to reach a new historical maximum.

And the final factor that we’re going to check out – the U.S. presidential elections

The outcome of the elections added buying pressure to Bitcoin’s upside price action, as Joe Biden, the candidate for democrats, was announced the victor after the preliminary count of votes. Amid the pandemic, American democrats have been acting strongly in favor of releasing a larger fiscal stimulus package for American people and the U.S. economy.

The more money is pumped into the economy, the higher inflationary risks become. Therefore, the initial market reaction to Joe Biden’s lead has been strongly bearish on the dollar; Bitcoin was no exception.

What should we expect next?

I expect the coin to reach $50,000 by the time Q1 2021 ends. Next, I expect to see BTC reach $80,000 by the end of Q2 (June 30th, 2021). Historically, summer has been the time of year when the price volatility slows down, so Q3 likely won't see that much action.

But, in Q4, meaning by the end of next year, I expect the price to reach $90,000.

The stock-to-flow model has been extremely accurate when it comes to predicting the coin's price action. On the fundamental level, BTC scarcity is highly correlated with the value of the network, especially since its rate of production dropped.

Lastly, there is also the increasing demand from institutional investors who are looking to hedge against inflation, which could cause the price to double within only a few months since achieving this recent milestone.