While each country has its currency, it is time to get some common ones. The cryptocurrency emerged, but significantly few rich people were and can think about possessing it. A common man with a pervasive life can’t think about it right now. Then who are the people having the bull-run in the field of cryptocurrency? Who can afford it, and how are they doing currently?
Bitcoin, the most popular cryptocurrency, has recently crossed the magic mark of $ 20K. This exceptional figure has given many people an excellent profit who has invested in Bitcoin. They are getting super-rich because of this investment. This achievement has to be mentioned as a remarkable one because the year 2020 had been a very tough year for many businesses to keep afloat. Also, it is appreciated by more than 500 percent of people since March.
Beyond a doubt, it is the best investable asset across all financial markets. What is the real reason behind more boom in Bitcoin than the year 2017? Why has Bitcoin surged so much ahead in 2020? The reasons can be stated as follows-
Competition with US dollar
There was thinking among American strategists that amid COVID-19, they would be printing the US Dollars in limitless quantities allowing the country to keep running large deficits without apparent consequences. However, from when the first stimulus checks deposits started, the greenback started trending downwards. The Dollar Currency Index hit as low as in 2018. The explosive growth in the registration of Bitcoin estimated the start of a bull-run. Seeing the downfall of DCI, the investors opted to turn to the top cryptocurrency, Bitcoin. Thus making the final blow, the stimulus deal of $900 billion agreement between the US lawmakers come into effect.
Giant institutions joined the bitcoin market
Michael Saylor led multinational MicroStrategy surprised the financial world by converting $425 million of cash to Bitcoin. In 2013, Saylor was a skeptic of cryptocurrency, and today he converted $425 million and purchased another $700 million worth of BTC.
As per report by Globenewswire.com, Twitter’s Jack Dorsey’s payments Company Square bought $50 million worth of Bitcoin. Apart from them, MassMutual – an insurance company in Boston, One River Asset Management of Massachusetts, and Ruffer Investment also bought Bitcoin. When the asset’s price was trending $10000, Guggenheim Partners bought BTC, opining that the Bitcoin price must be at least $400000.
SkyBridge Capital, Anthony Scaramucci’s billion-dollar hedge fund, filed a Form D with the US SEC for its first Bitcoin fund. The initiation of the institutions is the great force behind the surge of Bitcoin this year.
Grayscale gobbling and block reward halving
Due to the initial way of operating the cryptocurrency, BTC rewards for the miners reduced to half this year. It was the third block reward halving. Thus Bitcoin miners will now get only 6.25 BTC for solving a block. This reduction in Bitcoin production points slashed the supply too—Bitcoin’s rallying price fuelled by the combination of halving and the high demand. The buying activity from crypto investment fund Grayscale added to Bitcoin’s supply shortage.
Non-believers becoming followers
Those experts who earlier believed that Bitcoin is not for stay have now changed their opinion by seeing Bitcoin’s consistent growth. They now think that there is a future to Bitcoin for sure.
Ray Dalio, the hedge fund manager, billionaire, and founder of Bridgewater Associates, recently admitted that the crypto-asset could be a good alternative for gold. Earlier, he has dismissed the idea of cryptocurrency has worth value. The Chairman of Sander Morris Harris George Ball, the ex-CEO of Prudential Financial and, who had criticized the Bitcoin regularly, recently said that the top cryptocurrency is a good bet for long-term investments. He stated that Bitcoin cannot be undermined by the government and won’t become worthless, so the traders and investors should revisit it.
These opinions from the top people who were earlier against Bitcoin are now gaining more attention from the people who had kept the idea aside some time back. They want to revise their plans by getting to know more about the top cryptocurrency. Hoards are investors started looking at it again in terms of immediate returns or the long-term investment.
The interest of retail investors
During the last year, there was an increase in the search attempts for Bitcoin. The rise in value appreciated not once but thrice. It is the indication that the retail investors are going to come in big numbers. Even though the search was low in comparison, the rise was much higher. It is undeniable that the credit for this goes to the big institutions who got themselves involved in the cryptocurrency market and invested massive amounts.
Participation in the defi market
The Ethereum-based decentralized market grew fast this year, but the exciting thing is that there is even more growth in the supply of tokenized Bitcoin on Ethereum. People have purchased tokenized BTC assets in exchange for the real coins to access several DeFi protocols related to borrowing, lending, swapping, etc. The BTC’s value appreciated against the US dollar because of the pressure in the Bitcoin market. The quantity value of Bitcoins on Ethereum is currently above 140000, $3.3 billion to the BTC-on Ethereum ecosystem.
While most of the world population might still not have heard anything about the cryptocurrency or Bitcoin, the market players are surging ahead to confirm a long-term deal in terms of Bitcoin. But one thing is sure that now more top people realize the importance of Bitcoin or cryptocurrency and go-ahead to invest the money.
No one knows one day, it may become the whole world’s currency, but to happen that the value of it has to be affordable. In the current time, even a typical rich person cannot think of having crypto-based assets, then what would one say about ordinary and poor people?
To date, it seems that it will take a very long time for it to become a reality. However, you cannot deny that there is a bull-run for the Bitcoin.