In the past few weeks, it has been observed that bitcoin’s price is continuing to march higher. The growth of bitcoin seems unstoppable, but what are the reasons behind its growth? There are definitely plenty of factors that drive bitcoin’s value, due to which its value is rising. Bitcoin is continuing to break the key resistance level, impressing bitcoin investors and making them believe about its price that will reach further upside. The main reason people invest more in cryptocurrencies like bitcoin is rising inflation today, which is frustrating.
Resistance in previous times
Bitcoin’s journey was full of fluctuations, and it has seen extremely volatile troughs and peaks simultaneously. In the last peak of bitcoin, its price reached around $14000 in 2019, whereas currently, in today’s time, bitcoin is experiencing hard resistance, which made it difficult to cross this stage. If the price of bitcoin was to break through previous resistance, it would have triggered a bull market. But it failed for bitcoin bulls, aa bitcoin’s price reached down to $3800.
What is the current user adoption rate of bitcoin as a method of payment?
Earlier, people only used fiat currencies, but with online payment methods were introduced, people find them highly convenient and helpful. Now, one of the main reasons behind the growth of bitcoin’s value is the growing adoption of it as a method of payment. Even a few months back, PayPal announced that it’ll allow its merchants and other users to buy, sell and accept popular cryptocurrencies. Not only PayPal but Tesla and few other multinational companies are accepting and dealing in bitcoin, which is a significant factor that leads to an increase in its value.
Ever since the news of Tesla and other multinational companies came, bitcoin’s price reached the sky. Along with bitcoin as a method of payment, the current news or latest trends are another factor that leads to an increase in its price. PayPal has given around 350 million users the ability to buy, use and store bitcoin and other popular cryptocurrencies. Even there are around 20 million users or merchants that are actively accepting bitcoin payments and are promoting bitcoin.
Inflation and craze for investing in safe-haven assets
Another significant reason behind the rise in bitcoin’s value is the increasing inflation rate of the Indian Rupee and U. S. Dollar. With increased inflation, the purchasing power of fiat currencies gets decreased. In the current stimulus packages, it has been found or reported that the United States has added approximately $2.4 trillion to their economy. This made people worry more about the increasing inflation rate and decreasing purchasing power of the dollar.
Most investors have chosen the option to invest in safe-haven assets to hedge themselves against the current increasing inflation rate. It has been all over the news that people are taking shelter in safe-haven assets that are known to appreciate in value over time.
Publicly traded companies
A large number of publicly traded companies are investing and holding bitcoin to gain the maximum profit out of it. There’s current news about Bitcoin that states that companies like Square Inc., DigitalX, Galaxy Digital Holdings, Hive Blockchain and many more have stockpiled their money in bitcoin.
Performance of Bitcoin in 2020-21
Investing in bitcoin and other cryptocurrencies is highly speculative and risky, as shown in the news, but people are highly investing in Bitcoin and other popular cryptocurrencies. The reasons behind this growth are mentioned in the above paragraphs. It is expected that in late 2021 bitcoin’s value will increase to $100,000. It is yet to see the performance of growth in late 2021, but as of now, bitcoin is ranked at the top headlines of news channels because of its tremendous growth.