Home | Press Release | Bitcoin has set a new record of $ 50,000: What happens next?

Bitcoin has set a new record of $ 50,000: What happens next?

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phisycal bitcoin on chumps of gold

As we ushered in 2021, Bitcoin’s value continued to soar. If you’re an investor, you may not ignore the rising importance of digital currency amidst the Covid pandemic. Although many analysts had predicted that the virtual currency would continue marching higher in 2021, they hadn’t anticipated that the value would soon hit the $50,000 mark. But what’s the force behind this phenomenal growth?  Some specific drivers are causing the rise in the price of Bitcoin. Here, we’ve explored some of these factors and offered helpful tips on how you should take advantage of the situation.

Large-Scale investors

An essential factor for the remarkable rise in digital currency value is the massive influx of investors from big companies comprising pension schemes, investment trusts, and investment institutions. In its previous bullish experiences, Bitcoin price increases were primarily driven by individual retail investors. These individuals were mainly driven by the fear of missing out (FOMO) due to Bitcoin’s scarcity.

The narrative in 2021 is different as big institutional investors join the Bitcoin bandwagon because the digital currency is viewed as a haven for investment. Due to economic doldrums brought about by Covid 19, fiat currency is likely to lose value and weaken the value of investments. Therefore, institutions are looking for an asset that hedges against inflation and retains their assets’ value. And this is how Bitcoin comes in. Bitcoin’s mining is capped at 21 million, meaning that miners can’t continue producing the digital currency once it hits the peak.

Lately, a trend is emerging where institutions have started converting their cash held in treasuries over Bitcoin, proving to be the best store-of-value. For example, MicroStrategy turned $425 million to BTC. More companies are converting their cash in treasuries to Bitcoin, which has bolstered the notion that digital currency is the best store-of-value.

Wealthy individuals like Paul Tudor Jones and insurers like MassMutual have also invested in Bitcoin. And all these moves have helped enhance the trust among the people, hence the rising growth being witnessed.

Adoption as a payment method

A key reason why Bitcoin appreciates is its acceptance as a means of payment by many individuals and institutions. The famous e-wallet has indicated that it’s soon letting its users and merchants purchase, trade, keep, and approve BTC and other virtual currencies as a type of payment. This is good news because PayPal has more than 350 million users who can now start buying, retaining, and using digital currency.

PayPal rivals, including Square and CashApp, also approve digital currencies, which widens the BTC market and raises its value.

Helpful Tools

Many people avoid products that require sophisticated technology to deliver results. In the past, people have thought that Bitcoin is technology-laden, and it may need a lot of time and knowledge to understand it. However, things are now different, as multiple tools can help you. The bitcoin market is now awash with numerous devices, like Bitqs, that can help people trade without fear. With the help of these tools, you don’t need to be actively involved in Bitcoin trading. And many people are now engaged in Bitcoin trading due to these helpful products.

Bitcoin’s Attributes that overcomes standard currencies

Because Bitcoin has been around for over a decade, many people know the digital currency. The digital currency has specific attributes that overcome traditional payment systems’ challenges, which many people are discovering. Some of them include:

  • Fast payments: Transactions through Bitcoin are prompt compared to the standard payment solutions. Because many people need fast settlements, Bitcoin is gaining popularity as one of the quickest means of payment.
  • Affordability: many people avoid buying goods online because of the cost of transactions. Transactions through standard payment methods must pass through third parties who must verify them. Approvals attract charges that add up to increase the cost of products/services. But Bitcoin transactions are much, far cheaper than the standard ones. Therefore, many people are embracing digital currency to enable them to cut settlement costs.
  • Confidentiality of transactions: in standard payments, transactions must go through third parties for approval. However, multiple people may not like the idea of banks knowing what they’re about to buy, especially when purchasing confidential products. For example, when purchasing a CBD product to treat your chronic pain, you may not want the banks to know because of the stigma attached to the product. Therefore, Bitcoin becomes the best bet for you, and many people are embracing it.
  • Immutability of transactions: Bitcoin uses Peer-to-peer technology that doesn’t accept reversals when transactions are complete. Many businesses are victims of chargebacks from malicious clients. Such individuals are resorting to Bitcoin to cushion their business accounts.

The Covid 19 pandemic

Because of Covid 19, stock markets slowed down their operations, a move that has resulted in many investors recording huge losses. Bitcoin has come in strongly as an alternative investment method that operates outside the fiat currency.  The value of many fiat currencies has gone down because of inflation. However, Bitcoin value is increasing because of the digital currency’s scarcity. Due to this, many individuals are scrambling to share Bitcoin, hence the remarkable growth being witnessed.

Fear of missing out (FOMO)

Due to multiple positive stories about Bitcoin, many people are rushing to invest in it so that they can also reap big. This has caused an increase in want for the scarce currency. According to the economic fundamentals, when demand is high, the price of a commodity increases.

Attainment of Maturity

During its initial stages, Bitcoin entered the market as a way of purchasing medicine online. However, innovators realized that blockchain technology could be used for other purposes. It was challenging to explain to individuals about Bitcoin-related technologies in the early days, like keys, public ledger, and others.

Since then, Bitcoin has undergone significant changes that have made it to be a popular digital currency. Furthermore, you can access the digital currency via multiple exchanges situated all over. Also, there are now tools that can help investors trade in Bitcoin so that you can get involved even with little knowledge.

Positive Analysis

Favorable comments by Wall Street analysts have had a positive impact on Bitcoin’s value. Some words strengthen the idea that soon, Bitcoin can be a particular investment class that hedges against inflation. Other positive remarks touch on the decentralized system and what it can achieve.  For example, comments on how smart contracts can happen on blockchain technology have created a lot of interest in Bitcoin. Many people want a system of executing contracts that is affordable and prompt. And that’s what blockchain technology provides.

Easy access

With a possible data connection and a smartphone, you can easily access blockchain technology and start using Bitcoin. Unlike the standard payment methods that accept specific clients, Bitcoin can approve any person, regardless of their social status.

The supply challenge

One of the factors driving up the value of Bitcoin is the limited supply of the currency. The availability of digital currency depends on the amount which is in the market. And this is how the miners come in. They’re the ones the market turns to mint the coins. What you need to acknowledge, nevertheless, is that the available miners are too few to mint enough coins for the insatiable market. And sometimes, the miners get incentives to keep holding their assets as the value rises.

Renewed interest from central banks

At first, many people thought that governments all over the world would ban digital currency. However, lately, many governments are showing positive signs of embracing Bitcoin. Moves like crafting regulations to tax cryptocurrency holding signifies that some governments are now recognizing and approving digital currency.

Bitcoin’s privacy ideology

Bitcoin was formed to enable people to buy things freely in the online space without much intrusion from third parties. And the idea of stealing holds sway in the market. Many people are yearning to have a payment method that doesn’t attract intermediaries. For one, intermediaries are expensive and even don’t add any value to their transactions. Secondly, many people wish to enjoy their privacy while shopping online, and they don’t like showing third parties what they’re purchasing. Bitcoin fills the need for a privacy void. Digital currency uses a decentralized system that operates on a peer-to-peer basis. So, users aren’t obliged to reveal their identities.

The Future of Bitcoin

The continual growth of Bitcoin witnessed in recent times indicates that the digital currency’s future is bright. We have seen a situation where multiple entities embrace Bitcoin as the best digital currency for investment and a payment solution. Governments worldwide have shown interest in digital currency, and we anticipate that soon, digital currency may be mainstreamed.

Final Thoughts

Currently, the price of Bitcoin keeps going up due to multiple reasons, as listed and explained above. For example, Bitcoin is easily accessible to the public, provides the best hedge against inflation, and enjoys massive positive analysis. Soon you should anticipate an elevated demand for Bitcoin as the digital currency may be mainstreamed.

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