The price of Bitcoin reached $ 20 for the first time in history, as the popularity of the world's most sought-after cryptocurrency among investors continues to grow.
According to the CoinMarketCap website, the price of bitcoin broke the $ 20 barrier for the first time in its history. The historic milestone comes two weeks after the previous record high was reached. Bitcoin price has risen almost 000% in the last 7 hours and is now trading at $ 24.
Bitcoin is up more than 170% this year, fueled by demand from institutional investors, lured by its rapid growth potential and perceived resistance to rising US dollar inflation.
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Is this rally similar to what we saw in 2017? Definitely not, as there are other factors that affect the current bitcoin market. This time, among these factors, we can highlight the growing demand from institutional investors, the growing diffusion of the coin, and the emerging understanding that Bitcoin can function as a reliable store of value.
Major Factors Affecting Bitcoin Price
Three years ago, Bitcoin attracted only retail investors, among them there were many young enthusiasts who were captivated by the idea of changing the world with new currencies. Today the situation has changed. Institutional investors have now joined the game and this group is now largely backing the rally.
Institutional investors do not perceive Bitcoin as an asset for short-term strategies. They see BTC as an alternative to gold and a new store of value. MicroStrategy is a good example of such a newcomer to the game who is actively moving forward. This American company has already invested an impressive amount in bitcoin and is not going to stop. So yes, it is a great example to showcase current trends and a good example to follow for many other companies.
The situation in the market
Earlier today, Bitcoin (BTC) overcame another of its biggest price hurdles this month, breaking the $ 19 resistance level that analysts believe could send Bitcoin into uncharted price territories above $ 500 or more. BTC has been trading well below the $ 20 benchmark since the world's first digital currency hit an all-time high of $ 000, according to an earlier report Coinspeaker.
This new rally was due to renewed buying activity around bitcoin as well as other economic news emanating from the United States. According to Politico's Jake Sherman, there is speculation that the long-awaited deal to spur the spread of the coronavirus in the United States will be reached within the next 24 hours.
A potential economic stimulus deal could push market bulls to resume buying Bitcoin in anticipation of a drop in the dollar index. Coindesk reported that French multinational investment bank and financial services company Societe Generale SA (EPA: GLE) is forecasting a further 5 percent drop in the dollar index (DXY) in 2021 and an even greater decline thereafter amid the fall in the US dollar. years old. The French investment bank is not alone with a bearish outlook for the US dollar, with the trio Morgan Stanley (NYSE: MS), JPMorgan Chase & Co (NYSE: JPM) and Goldman Sachs Group Inc (NYSE: GS) also forecasting the dollar to fall in the coming year.
The current data for the Dollar Index, a benchmark for comparing the value of a currency against other major currencies, shows the value is at a 32-month low at 90,20. This decline in the dollar has been the main reason why firms like MicroStrategy Incorporated (NASDAQ: MSTR) have chosen Bitcoin as their hedge fund main asset for their Treasury reserve policy, and why new investors may also stock up on the coin.
In the very first incentive checks issued in the second and third quarters of this year, many Americans invested their money in buying bitcoins (BTC). There are also indications that this pattern could be repeated if households pick up incentive checks.
While bulk buying by institutional investors has a more decisive impact on the price of bitcoin, the almost negligible role of retail investors using their incentive packages to buy BTC could also contribute to the coin's attempts to reach its all-time ambitious level. high price before the end of the year.