Bitcoin is one of the most efficient ways of transferring money through online platforms. The process is controlled by a decentralized network that offers transparency with a specific set of rules and regulations, presenting an alternative to central bank-controlled money.
Bitcoin hit a fresh record high of $23,000 on December 17, 2020. The price reached a record mark of $23 000 just in a day from $20,000, which has earned 220% profit for the investors. This can be assumed to be the increasing interest of investors as their perceived vision helped them keep trust with the cryptocurrency. Bitcoin is gaining popularity and has reached its peak by an increase of 10.5% this year, making it the largest cryptocurrency across the globe. The volatility of the price of Bitcoin is making it the most practical choice for investors. The sudden rise in price in the market of Bitcoins gives advantages to the investors to earn huge profits. When the market is up, investors can make huge profits using the market’s volatility. The pandemic has created the importance of digital money across the global markets.
Bitcoin is liquid money and can easily be sold, which helps fight any market crunch situation. A Norwegian man once bought $27 worth of Bitcoin, which increased to a valuation of $980000 in the year 2013. The history of Bitcoin shows the continuous rise and fall of markets over several years. It exceeds the value of $18000 that took a higher percentage of the market, which is also high as compared to the value of Hollywood. For these Reasons Why Bitcoin Hit All-Time High as compared to the value of traditional coins. The recent increase in Bitcoin’s market price can have numerous reasons, and its stability cannot be judged. The fundamental reasons for this increase cannot be exactly stated, but speculations are all around.
1. Institutional Interest
Not a single day goes without news that some financial institution is interested in Bitcoin and investing in them. According to Citi analysis, Bitcoin can reach $318 000 by the end of 2021. According to JP Morgan reports, people are buying more than three times the rate than the last quarter. Analysts are anticipating that Bitcoin can be pitching in to replace gold in the coming days. From the analysis of JP Morgan Chase, it is observed that investors are buying into the publicly traded Grayscale Bitcoin Trust (Grayscale Bitcoin Trust is a unit of Digital Currency Group that owns CoinDesk). From the reports of CoinDesk, November 20, a money manager said Macro Opportunities Fund would invest 10% of its assets to Grayscale Bitcoin Trust. Bitcoin introduced in 2011, is the first large-scale implementation of blockchain technology. The interest in Bitcoin and cryptocurrency is nothing new as IBM was associated with Bitcoin and Stellar in 2019, when they launched a platform Blockchain World Wire network that gave a major boost to cryptocurrencies. The advantage of this network over other networks includes its ability to transfer fiat currency and Cryptocurrency over the same global markets.
2. The Futuristic Vision of Hedge Fund Managers
Hedge fund managers are considering Bitcoin as a medium for long term investment. Famous managers like Paul Tudor Jones II and Stanley Druckenmiller said the price of Bitcoin in terms of U.S. currency as Federal Reserves are printing money to face the economic crisis caused by the outbreak of Covid-19 virus. The Central bank has produced $3 trillion of new money in 2020, more than three-quarters of money produced in the last 107 years. The transparency of use and advantages like no transaction fees, no VAT charges, and no need to share personal information are the primary reasons behind Bitcoin’s growing popularity. According to hedge investors, Bitcoin is one of the most promising methods of investing in digital currencies. It can give more returns than the traditional stock market and equity shares. The Bitcoin is active 24X7, unlike the equity shares. The analysis can be made by taking data for a brief period, giving an idea about Bitcoin’s market. The experience of 3 to 5 years in Bitcoin is enough and for a lifetime compared to other share markets where you need more than 15 to 20 years. It can be said that Bitcoin is going to replace other forms of assets as they can hedge against inflation and compete with gold in terms of investing in assets.
3. Positive Analysts
The analysts from Wall Street have made positive comments over the past few days regarding Bitcoin’s future. The statistics show that it is going to become the largest cryptocurrency, according to a global market. According to the reports of CoinDesk, Alliance Bernstein, a $631 billion money manager, asserted that the post-pandemic economic conditions might create a role for Bitcoin in investors’ asset allocation. Inigo Fraser Jenkins, co-head of the portfolio strategy team at Bernstein Research, wrote that when hedging against inflation plays a huge role, Bitcoin drivers will be similar to gold. U.K. asset manager Ruffer revealed that around 2.5% of its portfolio invested in it. It will prove beneficial when the devaluation of valuable currencies is taking place in the global markets. The market and the investors are anticipating that this time the increase in demands will remain stable as the investors of reputed organizations like PayPal Fidelity, Square, and MicroStrategy are showing interest in Bitcoin. Guggenheim’s Partners CIO Scott Minerd believes Bitcoin’s price must be worth $400,000. According to him, rampant money printing by the Federal Reserve has increased the interest in Bitcoin. The current crisis in the world, the fall of U.S. currency value, and a massive flow of money will help Bitcoin continue its high price making journey. The year 2021 will be the iconic year for Bitcoin, and it is going to remain positive for the next year as well, as said by the chief executive of Isle of Man-based Bitcoin and Cryptocurrency exchange coin corner Danny Scott.
4. The PayPal Effect
PayPal (PYPL) allows 346 million active accounts for the consumers across its 26 million merchants worldwide. The payment network will allow the purchase, sale, and rent of Bitcoin. PayPal services do not allow withdrawal or deposit of the cryptocurrency. Once they are bought, they will stay in the account until they sell. Initially, the services support Bitcoin (BTC), Bitcoin cash (BCH), ether (ETH), and Litecoin (LTC). The sudden outbreak of Covid-19 has increased digital money, increasing the impact of cryptocurrency in the global markets. By the beginning of 2021, PayPal will convert the customers’ fiat cryptocurrency to any selected cryptocurrency without incremental charges. Paypal is assertive about their inclusion of cryptocurrency in their digital wallet. Initially, the customers’ will not be provided with public keys for security reasons.
5. Okay on OKEx!
OKEx is one of the largest cryptocurrency agencies, which have witnessed an outflow of 24361 Bitcoin, which is the largest as recorded since the March market crash. The most significant outflow happened after the five-week suspension withdrawal by the company. Some traders and analysts had anticipated that pressure might come upon Bitcoin for selling after the withdrawal of a five-week suspension. Data extracted from the cryptocurrency’s underlying blockchain network showed 24,631 Bitcoin, worth $500 million at current prices, flowed out of the exchange in the 24 hours after the suspension was lifted last week. The OKEx sold its stakes to other cryptocurrencies, which have created anticipation, that may cause a negative impact on Bitcoin. Although the issue of withdrawal of OKEx and price rise took in a little time gap, it’s a mere coincidence, and it may not have any impact on the price rise of Bitcoin.
Several rumors are have spread regarding the market price increase of Bitcoin, and it is said that the U.S. treasury may consider onerous cryptocurrency regulations. Traders are also speculating that some market giants may dump their holdings from the Bitcoin due to the price rise.
Conclusion
Bitcoin is growing its popularity globally, and it is becoming the largest cryptocurrency across several nations. The reason for this all-time high price for Bitcoin is possibly the economic crisis that is caused by the pandemic. The price drop of valuable currencies like the U.S. dollar leads more investors to bet on Bitcoin. PayPal is one of such renowned organizations that has included Bitcoin in their digital wallets. The analysts are optimistic about this growth of Bitcoin as they believe the conditions will remain stable even after the pandemic is over. Apart from that, the hedge fund investors are a firm believer in the effectiveness of cryptocurrency in the modern-day market, and every large global organization is positive about the rise of popularity and price for Bitcoin. It feels just a matter of time now to introduce Bitcoin as the new emerging global currency.
She is a content marketing professional with 4 years of experience. She has her expertise in corporate communications, along with various field of content writing and editing ranging from e-commerce, B2B content, market research, as well as entertainment. She believes content is able to add a great impact in web-marketing and thus she is focused to reach the height with her ever strengthening ability in every sphere of writing and editing, where her content will make a difference in marketing and business strategies.
