TMCnet Feature
November 17, 2020

Reasons Behind the High price of Bitcoin

During the uncertainty of the US elections, the poor situation of the fiat market encourages investors to invest in Bitcoin,

Bitcoin has continued to move towards high prices, there are different factors that continue to cause BTC to rise in price, breaking the key resistance level and increasing investors’ belief that its value will go higher. According to an article published in Investopedia on November 5, 2020.

 The high inflation rate and increased stimulus make it a safe-haven to invest in. The growing adoption by different payment companies like Paypal is providing easy access to Bitcoin, which increases the interest of local trading companies, and they have started trading in bitcoin and other cryptocurrencies. Looking at its historical trend, it is continually and extremely bullish.

 Resistance level

Investors have considered bitcoin the most volatile currency as a digital currency in the past. Its peaks and troughs were extremely volatile: in June 2019 it reached 14000 US dollars resistance level but failed to break the point.

At that point, if Bitcoin went through that point, then it would trigger a bull market trend, but it failed to break that resistance level and fall back until reach 3800 dollars.

Bitcoin again reached that point and fell back again, but in November bitcoin went through the 14000 dollar line and kept its travel upward, making an all-time high next resistance point of 20000 Dollars  

This made investors believe that bitcoin will go higher than 20000 dollars, Bitcoin can cross this point as it has shown in history, which increased the value and adoption of bitcoin.To know more about bitcoin visit Bitcoin storm cryptocurrency robot

Rush to the Safe-Haven Asset

The major reason for the increase in Bitcoin value is the COVID-19 pandemic and inflation of the US dollar, which is 2% yearly, people investing in bitcoin because of the decreasing purchasing power of the Dollar.

The US government has supported the economy with 2.4 trillion Dollar stimulus packages that have worried the experts about decreasing purchasing power and increase inflation in the State,

To cope with this situation and rising inflation, people are trying to seek shelter in different historical assets, which keep their value most of the time. These assets which consider as safe-haven are like stocks in the sector,  precious metals, which are less volatile, Bitcoin is a recent safe-haven asset.

Currently, bitcoin has proved itself as the best safe-haven asset in the world. People are now turning their dollars into Bitcoin and as per economic laws, the increase in demand increases the price

Use of bitcoin for payment

Along with many other reasons for rising bitcoin's value is its growing demand and adoptions as a payment medium, PayPal announced its services of crypto payments that people can use Bitcoin to send and receive payments. Users can keep, buy, sell or exchange bitcoin or other digital currencies for payment methods.

After the announcement, bitcoin’s value went higher immediately because of the trust of people in PayPal (News - Alert). There are more than 350million people using PayPal worldwide will now easily buy, sell, or store Bitcoin or other cryptocurrencies, while over 20 million companies are accepting Bitcoin as a payment.

 Another world-famous payment app which has above 40 million active users is Venmo. Venmo, also offering the same services as PayPal for cryptocurrency and Bitcoin, has made access to bitcoin easier than ever along with increasing bitcoin prices.

Aside from Paypal and Venmo, there are many other famous crypto host companies providing services like Square, CashApp, and many others, which are increasing audience and users of Bitcoin as currency 

 Investment by public companies

As Bitcoin has proved itself as a Safe-Haven asset, this narrative is continuously growing among the investors and traders, instead of holding cash for a long time in this highly swinging market, they prefer to invest in safe assets.

Previously only individuals were thinking about the strategy, but now big publicly traded companies are converting their assets with cryptocurrencies mostly with bitcoin, it has the most sound store of value than cash, there is no issue to store Bitcoin and it can be used as a store-of-value and as much cash as other fiat currencies.

MicroStrategy, a big business analytics company, has just invested over 425 million dollars in bitcoin. After this investment, another company, Square, also invested 50 million dollars in it. Since then, many other big giant companies are following the trend and confidently investing in Bitcoin that not only increases the adoption of Bitcoin among individuals and increases its value

» More TMCnet Feature Articles


» More TMCnet Feature Articles