Bitcoin goes big, why?
Updated: Jan 4, 2021
What a ride the US election and global pandemic has been on so many levels - emotionally, mentally, economically, politically...
The world we live in is being reshaped in many ways and the investment landscape is no exception. One area that has been in the works and is getting traction in new ways is cryptocurrency, particularly bitcoin (BTC). About Bitcoin... The price of bitcoin has reached an all time high for 2020 and is approaching the overall high of $20,000 USD/BTC last seen in 2017. As historical context, this was during the late 2017 bull run (a period where the price increases) before it took a big correction in 2018 to lower price levels for a couple years. This time around though, investors are generally feeling optimistic and hopeful that the bitcoin market has matured to a point where there won’t be those 2017 dramatic swings. Why is it different this time? Here’s a few reasons to note about why the bitcoin market is experiencing big shifts in its evolution:
The pandemic effect on the economy - governments and central banks are stimulating the economy by printing money and injecting trillions of dollars into circulation. Without an increase in production, this is diluting the value of the dollar and investors are looking for alternative assets to store their wealth - gold (price of gold has risen nearly 30% in the past year) and bitcoin have both seen lots of gains in price during this time as the demand has surged.