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What is the driving force behind the rise of Bitcoin

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What is the driving force behind the rise of Bitcoin

What is the driving force behind the rise of Bitcoin? According to btcmanager, the price of Bitcoin skyrocketed from $30000 to its current highest level in April 2019. According to Coinmarketcap data, the total market value of Bitcoin as of the end of 2018 was $2 trillion, an increase of about 20 times compared to the same period last year and more than double the previous year. With the development of the Cryptocurrency market and the increasing demand for Bitcoin from mainstream financial institutions, Bitcoin has gradually become one of people’s investment choices. However, in the past few months, more and more investors have begun to recognize the potential of this digital asset and consider it a long-term investment approach What is the driving force behind the rise of Bitcoin? In fact, it can stimulate market price increases by driving the entire market up

Reasons for Bitcoin’s rise

Bitcoin has risen by 10% in the past week, breaking the $12000 mark.

. From the end of November last year to now, it has increased by nearly 80% According to Cointelgraph, two factors have recently led to an increase in Bitcoin prices: firstly, the US election and policy support from the Federal Reserve; The second reason is that the global market’s attention to the Cryptocurrency market and people’s increasing interest in blockchain technology, especially Ethereum and other projects, indicate that investors are looking for new funds to enter this field. “If you want to say why do we buy Bitcoin? Does it mean that we really need to buy more gold?” The price of Bitcoin has now exceeded the historical high of more than 14000 dollars (as of the time of writing). However, as more and more institutions and financial companies begin to accept and invest in Cryptocurrency to bring value storage and asset management services, this number may rise further. This may indicate a significant rebound in Bitcoin prices in the second half of this year or early next year

In addition, since 2013, Bitcoin has been the “rat poison” of the encryption industry, because it is the largest and most secure Cryptocurrency in the world, so its market value is stronger than all other major currencies. It can even be said that Bitcoin is also regarded as a scarce commodity. “As an emerging thing, many people in the world are doing many things with their own money” There are many reasons for the price increase of Bitcoin. Firstly, many people believe that Bitcoin has a hedging function. For example, if you can have some gold, you can exchange it for Bitcoin. Then, by adding some fiat currency or gold bars from the bank, a certain fee can be paid and corresponding returns can be obtained. However, this approach is not effective, so a variety of problems will arise, which will result in many unnecessary transaction frictions and costs, thus affecting the development direction of Cryptocurrency. Secondly, due to the similar characteristics of Bitcoin and gold, and being a relatively stable asset class, it can be used for speculative trading, which is a very worthwhile aspect to consider Finally, another important viewpoint is the technological concept behind Bitcoin, which is also one of the important forces driving its future development. According to a report released by EvolveResearch, an international third-party auditing firm, in June 2020, only 5% of respondents believed that Bitcoin was a reliable investment alternative in the three months from 2016 to 2017. However, there was only a large amount of data on Bitcoin in early September 2017, including the bull bear cycle in 2017, when Bitcoin prices fell by about 30%, and in mid March this year, they fell by about 60%.

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