Why Is Bitcoin’s Price Rising? :- In recent weeks, the price of bitcoin kept climbing. But what is this development? It turns out that a variety of factors exist to make bitcoin go up in value. Bitcoin ATM Services
|Name||Price (USD)||Market Capitalization||Volume (24h)|
|Tether (USD Stablecoin)||$1.00||$0.305481||$47,103,649,239.00|
- Bitcoin broke a major resistance level that led investors to think there are more benefits.
- The prospect of rising inflation and even greater stimulus drives people to search for safer properties.
- With more and more adoption of payment apps like PayPal, many more people will get the convenience of cryptocurrency.
- Publicly traded companies that buy bitcoin show a high degree of trust in its appreciation.
- The historical trend of bitcoin shows an ambitious and highly optimistic approach to closely follow its stock-to-flow model.
Bitcoin has seen extremely unstable peaks and troughs in its time. Its last peak in June 2019 was near $ 14,000. At this point, bitcoin experienced stiff resistance and failed to pass this phase.
If bitcoin broke that resistance in June, the bull market would likely have gained momentum. Unfortunately, for bitcoin bulls, it was not at the low level of around $ 3,800.
In October, bitcoin only re-tested this resistance point. On November 4, bitcoin advanced directly through $ 14,000 and continued to climb. This is important because Bitcoin’s next resistance point is its all-time high of $ 20,000.
Since bitcoin no longer has a theoretical resistance point to its previous all-time high of $ 20,000, many investors have become optimistic that cryptocurrency will be able to regain that price or even exceed it. This speculation has led to an increase in the value of bitcoin.
Increasing crowd towards inflation and safe havens
Another reason for Bitcoin’s rise is the rising inflation of the US dollar. While inflation is an average of 2% every year, recent stimulus spending is intended to raise inflation levels and reduce dollar purchasing power.
With recent stimulus packages, the United States has added about $ 2.4 trillion to the economy. This causes concern about the inevitable decline in purchasing power of many dollars and rising inflation.
To hedge against this surge in inflation, many have withdrawn from the dollar and taken refuge in assets that have historically been valued or even appreciated in value. Generally, people with assets convert their dollars to avoid inflation or in volatile markets that are rarer or less volatile. The assets of these ‘safe havens’ include things like precious metals, stocks in the sector that are generally less volatile, and more recently, bitcoin.
Adopt as a means of payment
Another reason for bitcoin’s price appreciation is its increasing adoption as a payment method. Recently, PayPal (PYPL) announced that it would soon allow its users and merchants to buy, sell, hold and accept bitcoins and other cryptocurrencies as payment.
This news sent the price of bitcoin immediately. PayPal has about 350 million users who will now have the ability to easily buy, store and use bitcoins. PayPal also has more than 20 million active traders who can now accept currency.
Apart from PayPal, it has more implications. PayPal also owns the popular Venmo payment app. Venmo has more than 40 million active accounts, which makes access to bitcoin and other cryptocurrencies even more important.
While PayPal and Venmo are new to crypto, there are other apps that allow their users to buy, sell and hold them. Popular PayPal and Venmo competitors Square (SQ) and CashApp also accept cryptocurrency, thereby widening the bitcoin audience.
As noted above, bitcoin has a narrative as a growing-secure asset. In today’s social and economic climate, there is increasing incentive to have less cash and protect against rapid market changes.
Recently, a trend began where publicly traded companies were beginning to divert cash from their treasuries into Bitcoin as a more robust store of value. In particular, MicroStrategy, a business analytics firm, converted bitcoins into $ 425 million in cash in its coffers. Shortly afterwards, payment company Square made a $ 50 million purchase.
Since then, many companies have followed suit. The trust of these companies and their investors in bitcoin has enhanced the merit of the concept of bitcoin as a storehouse of value assets and safe havens.
Companies going public with bitcoin
|Type||Company Name||Market Cap||Purchase Price USD||Today’s Value||Bitcoin|
|Publicly Traded||MicroStrategy inc.||$1,683,626,857||$425,000,000||$577,685,925||38,250|
|Publicly Traded||Galaxy Digital Holdings||$339,244,998||$134,000,000||$251,478,388||16,651|
|Publicly Traded||Square inc.||$77,720,057,896||$50,000,00||$71,119,556||4,709|
|Publicly Traded||Hut 8 Mining Corp||$131,555,521||$36,788,573||$44,613,967||2,954|
|Publicly Traded||Voyager Digital LTD||$446,926,124||$7,927,182||$18,712,493||1,239|
|Publicly Traded||Riot Blockchain, Inc.||$183,461,250||$7,200,00||$15,903,354||1,053|
|Publicly Traded||Bit Digital, Inc.||$187,905,708||$10,080,00||$14,340,355||950|
|Publicly Traded||Hive Blockchain||$179,748,913||$2,696,219||$3,193,206||211|
|Publicly Traded||Cypherpunk Holdings Inc.||$6,279,450||$1,630,000||$3,981,124||204|
|Publicly Traded||BIGG Digital Assets Inc.||$44,177,930||$1,071,904||$2,189,921||145|
|Publicly Traded||Argo Blockchain||$23,793,751||$1,340,000||$1,902,965||126|
|Publicly Traded||FRMO Corp.||$284,011,422||$801,355||$949,066||63|
|ETF/Trust||Grayscale Bitcoin Trust||$8,426,430,433||$7,275,233,062||$7,275,233,062||456,537|
|ETF/Trust||CoinShares / XBT Provider||–||$770,170,932||$1,053,125,217||69,730|
|ETF/Trust||3iQ The Bitcoin Fund||$112,377,500||$91,189,025||$125,278,556||8,295|
|ETF/Trust||ETC Group Bitcoin ETP||–||$56,721,505||$78,764,025||5,215|
Companies Going Public with Bitcoin
Perhaps the most important reason for the increase in the price of bitcoin is the two features inherent in its design.
First: There are only 21 million bitcoins that will ever exist. There will be no more and no less and this number will always be constant. It makes bitcoin scarcer from anything already existing. Other rare assets are not 100% finite and, in some cases, can be manufactured artificially.
The second is a bitcoin-encoded process called solving. Originally, bitcoin has its own built-in escrow mechanism where bitcoin is released and given to the miner as a reward for processing transactions. This reward is cut in half every four years.
By doing this, bitcoin’s inflation rate halves with each stop and its stock-flow ratio doubles with each stop. This process continues every four years until all the bitcoins in this escrow system are released and put into circulation. Since then, bitcoin will be capped at 21 million in circulation. At the time of writing this report, there are 18,534,818 in circulation.
So far, the price of bitcoin has closely followed its stock-flow relationship and if it continued on this trajectory, by the end of 2021 the value of bitcoin could be around $ 100,000.
Cryptocurrency Performance: Year to Date
- Bitcoin (BTC) till date: + 111.66%
- Ethereum (ETH) to date: + 228.28%
- Waveform (XRP) YTD: + 28.90%
- Bitcoin Cash (BCH) YTD: + 31.91%
- S&P 500 YTD: + 8.35%
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