Bitcoin prices have risen almost 99% since the start of the year as the cryptocurrency benefits … [+]
Bitcoin prices have nearly doubled and increased so far in 2021 as the cryptocurrency benefits from increasing institutional acceptance.
According to CoinDesk data, the world’s most famous digital currency, whose total market value recently topped $ 1 trillion, hit $ 57,492.00 today.
After climbing to this level, Bitcoin had gained 98.7% this year, as additional CoinDesk numbers show.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
“Strong institutional demand”
The current bull market was significantly different from the one between 2017 and 2018, when bitcoin prices neared $ 19,800 but failed to maintain that level and fell below $ 15,000 in a matter of days.
The gains that the digital currency posted during that particular bull run were largely attributed to factors such as strong retail interest and widespread media coverage, while market experts often cited institutional investments as a major driver of the current bull market.
Jeffrey Wang, Head of America for Amber Group, spoke about this development, explaining that “strong institutional demand” comes with a lack of “willing sellers” to fuel what he calls “one-way price action”.
He went on to comment on how Bitcoin exchange-traded funds are contributing to this situation.
The Ontario Securities Commission recently approved two such funds, which began trading last week.
“We’re seeing more ETFs launching, which continues the strong demand for institutional buying. That kind of storyline actually means that fewer people holding BTC want to sell because they expect a higher price increase.”
Sergey Nazarov, Co-Founder and CEO of Chainlink Labs, also joined in, describing things from the perspective of companies that see Bitcoin as a means of hedging against inflation.
“Currently, companies around the world are being asked to provide a reason why they have no exposure to any of the best-performing assets of the past decade.”
“The media, researchers, and the general public have really begun to understand the long-term implications of Bitcoin’s use case as a store of value.”
“With several large corporations already adding Bitcoin to their balance sheets, many institutional stakeholders are wondering whether this is actually the inflation hedge that they should partially rely on as part of a broader diversification strategy.”
“If Bitcoin really does become the internet’s reserve currency, and you’ve had ten years to prepare, this will likely raise questions if your company doesn’t have at least one way to hedge inflation through BTC.”
Disclosure: I own Bitcoin, Bitcoin Cash, Litecoin, Ether, and EOS.