The bitcoin price has been steadily rising since last month, heading towards the moon. On 9 November, the digital currency broke its record by reaching a new all-time peak of US$68,000, and it is likely to continue to rise in the coming days.
The rise in bitcoin’s price has increased the market value of cryptocurrencies to more than US$3 trillion. However, the boom in bitcoin adoption is not a natural change. Several factors are heavily influencing this trend.
- Bitcoin as a payment model:
Today, a growing number of people are adopting cryptocurrencies merely for the ease with which they can trade them. Furthermore, some platforms offer these transaction services at a very minimal cost.
Another significant factor behind the bitcoin craze has to do with its use as an everyday payment model. Paypal, for example, just announced that its customers and merchants would be able to buy, trade, store, and accept bitcoin and other cryptocurrencies as a means of payment. With over 350 million users worldwide, PayPal’s announcement had a significant impact on bitcoin’s price. In recent months, many additional money exchange platforms have also enabled bitcoin transactions.
The prospect of profiting from the purchase and ownership of BTC tokens has piqued the curiosity of new investors.
- Preference over Gold:
Even though gold has traditionally been a classic and profitable investment, the new cryptocurrency trend has it at a disadvantage.
Concerned about growing inflation on gold and other alternative investment models, investors opting to add value to their portfolios by purchasing bitcoins.
Even JPMorgan has forecast that when bitcoin matures as an alternative currency, it might rise to US$146,000 in the long term.
- Increase in Institutional Adoption:
Founders of Bitcoin created it to be an independent currency and to shield against inflations. Wall Street’s collapse in 2009 illustrated just how bad things get if government agencies and banks suffer from catastrophic economic conditions.
As a result, several institutions are upgrading their crypto game by investing in digital tokens, particularly bitcoin. They see bitcoin as a safe refuge from volatility and inflation. Large businesses, on the other hand, are changing their cast assets into bitcoin.
- The halving of Bitcoin stimulates investment:
Anything with a limit or a bar on could become scarce. Satoshi Nakamoto got it right when he wrote the bitcoin whitepaper in 2009. The total number of bitcoins available for mining is 21 million, and as of August 2021, 18.77 million had mined. That leaves 2.3 million to put into circulation.
The halving of bitcoin is a significant event in the bitcoin network that occurs every four years. Bitcoin mining is the process through which digital coins launch into the crypto market. In terms of bitcoin halving, the reward for mining is decreased by 50% every four years. Every time a bitcoin halving has occurred in the past, the cryptocurrency’s price has risen dramatically.
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