Early adopters who saw Bitcoin’s potential in the last decade have been waiting this year for their entire life as crypto-investors.
The recent volatile corrections in Bitcoin’s volatile prices (BTC) could evoke images of the 2017 crash in their minds, or even the crash caused by COVID-19 in March of this year. But the fact that Bitcoin has reached $20,000 for the first time in history is no reason to raise the alarm.
Despite the fact that the price of the world’s most valuable crypt currency has gone up by more than 225% this year, the current rally we’re experiencing doesn’t look like the Bitcoin bubble we saw in 2017. Far from it. There are four key reasons for this:
Institutional investment in space is at an all-time high.
There is little or no media attention catapulting the price tag this time around.
Central banks and governments are beginning to see what is written on the wall.
Retail investors in emerging markets are investing in what they hope will be a revolution.
Bitcoin is no longer just for young tech-savvy millennials. Governments, central banks and large corporations can no longer ignore its value. That’s exactly why some historic investments by Bitcoin’s major sponsors made headlines in 2020.
These four reasons aren’t just relevant now; they’ll all continue to play a role in Bitcoin’s future growth. Consider this breaking news. Bitcoin no longer lives in a bubble, and soon, the traditional financial world is the only thing that’s going to explode.
Institutional investment in Bitcoin shoots up in 2020
A publicly traded business consulting company called MicroStrategy now owns 38,250 Bitcoin, currently worth just under $640 million. The BTCs were originally purchased for about $250 million earlier this year. Thanks to the huge scale of the purchase and its profitability so far, company CEO Michael Saylor has become a true Bitcoin evangelist. Aside from large investment funds, no company owns more Bitcoin than MicroStrategy.
Saylor and his company join Square CEO Jack Dorsey in his enthusiasm for Bitcoin. Dorsey bought about $50 million of the cryptomoney for his company. What’s more important than that $50 million investment, however, is that estimates suggest that both Square and its payment competitor PayPal are swallowing more than 70% of newly mined Bitcoin entering circulation. Square allows customers to use cryptomoneds as payment; PayPal allows customers and sellers to buy Bitcoin directly from their PayPal accounts. Both portals are currently creating a windfall for Bitcoin market capitalization.
Retail investors are no longer just following a mainstream media trend
In 2017, it would have been hard for you not to hear about Bitcoin. Whether a friend or family member told you about it at Christmas, or you heard about it on the news or in TV ads, the fact is that almost all the major media outlets were covering the price boom at that time.
If you look ahead to today, you can take a look at Google Trends to see that searches for the word Bitcoin have been trending high lately, but aside from specific television programming about the investment world, you don’t hear as much about Bitcoin in the mainstream media, with some exceptions of course.
This means we’ve reached a new milestone in adoption. More and more people know about crypto currencies than ever before, and they’re now following the asset class more closely.