Bitcoin’s price tremendously soared in just three months, and there are several factors behind the remarkable rise in cryptocurrency.
You could not have missed the information if you are interested in cryptocurrency. Starting in October, the price of Bitcoin has experienced a very marked increase in its value. Starting below 10,000 euros in September, bitcoin traded at over 15,000 euros at the end of November. Then it rose to 20,000 euros on December 25, before peaking on January 3 at more than 27,000 euros.
This cryptocurrency has never reached such heights.
The previous absolute record of bitcoin, established on December 15, 2017, with just over 14,122 euros, has been swept away. The new ceiling seen in early 2020 is almost twice as high. But since January 3, a correction in price appears to be taking place. The price registered a notable drop, of around 10%. After reaching 22,000 euros. The value of Bitcoin is now around 31,000 euros.
The price fluctuations that Bitcoin has experienced within days and even hours make part of the normal process. It doesn’t mean that the price is doomed to stagnate. In 2017, when Bitcoin value broke the top of $ 1,200, this cryptocurrency amounted for the first time to $ 3,000 before correcting, then gradually climbed to $ 20,000 by the end of the year. 2017.
The reasons for such an explosion in bitcoin’s price
How to explain such a boom, which made the cryptocurrency jump in a relatively short time? Various factors have played a role. PayPal was first on the list of reasons because the American company launched a cryptocurrency buying and selling service at the end of October, which also covers payments. This news made the price of Bitcoin soar immediately given the fact PayPal has over 350 millions of users who from now can store, use and buy Bitcoin easily.
Besides, PayPal is the owner of the very popular payment application Venmo which has more than 40 million active users. This made the accessibility and ease of use of cryptos even more significant.
Moreover, aside from the fact you can buy and sell cryptos via crypto brokers, many other apps apart from Venmo and Paypal, start allowing their users to pay services and goods using cryptocurrencies.
Growing interest from investment funds
But there is also a growing interest from investment funds, even though this cryptocurrency sometimes experiences sudden and not always predictable fluctuations. Analysts at major banks on Wall Street are tracking Bitcoin now. According to analysts, we are only at the beginning of the use of Bitcoin as a value similar to gold.
A lot of investors treat it as an alternative asset, a bit like gold. Bitcoin benefits in large part from the uncertainty of traditional currencies and is trending from record to record. The same goes for Ethereum and some other altcoins. Bitcoin “is increasingly becoming a diversification option for assets portfolio and reduces its dependence on governments and the traditional financial system.
There is a trend where publicly traded companies convert their cash into cryptocurrencies as more sound assets than any. For instance, a business analyst company, Micro Strategy converted more than $400 million of cash into bitcoin. Many other companies start to follow this trend. The confidence of investors in cryptos, notably in Bitcoin, has largely contributed to the crypto market’s growth.