Why Is Bitcoin’s Price Rising?
Why Is Bitcoin’s Price Rising? In recent weeks Bitcoin’s price has appeared to continue marching higher. But what is driving this progress? It turns out there are a wide variety of reasons that continue to make Bitcoin rise in worth.
- Bitcoin broke a key struggle level making shareholders believe there is further upside.
- Increasing inflation and the possibility for even more provocation continues to push people to safe-haven properties.
- Improved acceptance from payment applications like PayPal will give far more people easy access to cryptocurrency.
- Publicly traded companies procuring Bitcoin shows a high level of assurance in its obligation.
- Bitcoin’s historic trend of closely following its sharing stock-to-flow model shows an ambitious and extremely bullish outlook.
Bitcoin has seen tremendously volatile peaks and troughs in its time. Its last peak was near $14,000 in June of 2019. At this point, Bitcoin experienced a hard confrontation and it failed to push through this stage.
If Bitcoin were to breakdown in June it would have likely generated a bull market. Unfortunately, for Bitcoin bulls, it unsuccessful to do so and cascaded down to a low point of nearly $3,800.
Bitcoin retested this resistance point only to fall back down. On November 4th, Bitcoin pushed conventional through $14,000 and continued higher. This is important because Bitcoin’s next resistance point is its previous all-time great of $20,000.
With Bitcoin no longer having a imaginary resistance point until its previous all-time high of $20,000, many investors have become optimistic that the cryptocurrency will be able to retest that price point or even drive past it. This assumption has led to an increase in Bitcoin’s value.
Inflation and the Rush Toward Safe-Haven Assets
Additional reason for Bitcoin’s rise is the rising inflation of the U.S. dollar. While increase is on average 2% each year, recent incentive spending is poised to greatly increase the level of inflation and decrease the dollar’s acquiring power.
With the recent stimulus packages, the United States has added around $2.4 trillion to the economy. This has many worrying about the inevitable decrease in the dollar’s purchasing power and the rise in inflation.
To verge against this rising inflation, many have withdrawn from the dollar and have taken shelter in assets that factually have held value or have even appreciated in value. Typically, assets that people convert their dollars into to avoid inflation or volatile markets are ones that are scarce or are less unstable in general. These ‘safe-haven’ assets include things like valuable metals, stocks in sectors that are commonly less volatile, and more newly, Bitcoin.
Adoption as a Means of Payment
Another motive for Bitcoin’s price appreciation is its growing acceptance as a payment method. Recently, PayPal (PYPL) publicized that it would soon allow its users and traders to buy, sell, hold, and accept Bitcoin and other cryptocurrencies as a form of payment.
This news pushed Bitcoin’s price higher instantly. PayPal has nearly 350 million users who will now have the capacity to easily buy, store, and use Bitcoin. PayPal also has well over 20 million active merchants who can now accept the currency.
Aside from PayPal, this has further implications. PayPal also owns the widely general payment app, Venmo. Venmo has more than 40 million dynamic accounts, making the convenience to Bitcoin and other cryptocurrencies even more significant.
While PayPal and Venmo are newer to crypto, there are a host of other requests that allow its users to buy, sell, and hold. Popular contenders to PayPal and Venmo, Square (SQ) and CashApp, also accept cryptocurrencies making the audience to Bitcoin even wider.
As deliberated above, there is a rising narrative of Bitcoin as a safe-haven asset. In the current communal and economic climate there is a growing enticement to hold less cash and be hedged against intense market swings.
Newly, a drift started where publicly traded companies were beginning to convert cash in their treasuries over to Bitcoin as a sounder store-of-value. Most particularly, MicroStrategy, a business analytics company, converted $425 million worth of cash in its treasury to Bitcoin. Soon after the payments company Square made a $50 million purchase.
Since then, a number of companies have followed suit. The assurance that these companies and their stockholders have in Bitcoin has given increased value to the concept of Bitcoin as a store-of-value and safe-haven asset.
Cryptocurrency Performance: Year-to-Date
- Bitcoin (BTC) YTD: +111.66%
- Ethereum (ETH) YTD: +228.28%
- Ripple (XRP) YTD: +28.90%
- Bitcoin Cash (BCH) YTD: +31.91%
- S&P 500 YTD: +8.35%
Capitalizing in cryptocurrencies and Initial Coin Offerings (“ICOs”) can be very risky and hypothetical, and this article is not a sanction by cafegist or the writer to capitalize in cryptocurrencies or ICOs. Since each individual’s situation is exclusive, a skilled professional should always be referred before making any financial choices. Cafegist makes no illustrations or warranties as to the exactness or timeliness of the information contained herein.
For More Articles on Cryptocurrency WhatsApp +2348102796549