In 2021, bitcoin shows incredible increase rates – just the other day, the price of the cryptocurrency set a new all-time high – $ 51,155 (17.02). Since January 1, 2021, the rate of the main cryptocurrency has grown by 70% – by comparison, Tesla shares rose only 9.1% in 2021. Will the growth advance and what to anticipate from the main cryptocurrency?
A few months ago, the topic of bitcoin and other cryptocurrencies was not very popular. But already in December 2020, the demand and negotiability of Bitcoin skyrocketed, as did the cost of the main cryptocurrency. The number of researches with the word bitcoin has significantly grown.
Today, people write and talk about bitcoin in almost every media, and the reason for this is the lightning-fast rise in price, which has doubled over the past 2 months.
On December 16, Bitcoin traded at $ 20,000 – a new value record and a psychological bar. Many critics then talked about an immediate correction and called for trading BTC. However, since that day, Bitcoin has only increased and set new price highs.
Today, the cost of bitcoin is $ 51,100 and most specialists declare that the price of the cryptocurrency will continue to grow. But what makes the price of bitcoin increase?
Pandemic
Bitcoin started growing back in March 2020 amid the spread of the you-know-what virus. The pandemic led to an economic slowdown around the world: demand for petroleum stocks and raw materials dropped, and business activity slowed down in various sectors, primarily in the tourism, hotel, and restaurant business. Small and large businesses, as well as the economies of entire countries, have encountered the sharpest decline in recent years.
The United States, the EU, and many other countries were forced to stimulate the economy with the help of additional emission of money and social financing. Even then, many investors started to fear that such means would lead to a weakening of traditional currencies. According to trader Paul Tudor Jones, the authorities gave more than the state earns – the result of the policy of stimulating the economy will be the depreciation of traditional currencies.
Falling US dollar and unrest in America
The US dollar index, which measures the value of the dollar against major world currencies such as the euro, Japanese yen, and ruble, fell 6.8% in 2020. This decline is likely to continue in 2021. According to experts, the main reason for the depreciation of the dollar is the printing of money by the Federal Reserve System for more than $ 3 trillion over the past year, which is about three-quarters of the total amount previously created over the 108-year history of the US central bank.
Added to this is the unstable situation in the States itself – protests are burning up in America. After the presidential elections, the population split into confronting camps, between which conflicts frequently arise. A remarkable piece of news against this background was the detention of my grandmother with a loaded pistol and a “letter for Biden” near the White House.
The US dollars, which for a long time were the standard of stability and allowed saving savings, are gradually losing their status. Today, citizens of countries with large inflation, such as Zimbabwe, Venezuela, Kenya, etc., prefer to hold their assets in bitcoins rather than in US dollars. Experts think that due to the current position of America and its national currency, more and more countries will shift from the Dollar to Bitcoin.
Institutional capital
Great Companies and Hedge Funds have become much more actively involved in Bitcoin. Thus, the companies Tudor Investment and Guggenheim Partners declared the purchase of bitcoins using futures contracts on the CME exchange in Chicago. Even more traditional Wall Street firms like Morgan Stanley have sustained an upbeat attitude about BTC.
Big financial companies like PayPal and Fidelity also bought bitcoins, while Square and MicroStrategy used their assets to buy bitcoins. In the CIS space, one can note the interest in bitcoin assets on the part of the Czech investment company Goldfort. Over the past several months, Goldfort has collected large amounts of BTC and the Bitexfin cryptocurrency exchange.
And Elon Musk’s Tesla recently entered institutional financial institutions. The company invested $ 1.5 billion in bitcoin – this helped the cryptocurrency to add 8% to its value as soon as possible. Analysts at JPMorgan Chase, the largest bank in the United States, newly prognosticated bitcoin’s long-term price of $ 146,000. Time will show whether this forecast will come true.
