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πŸ”₯ 3 Reasons for the Sharp Increase in Bitcoin Price


Bitcoin has exhibited a sharp increase in price within a month. And this has left many investors and analysts concerned and stunned about the possibility of a market bubble. Since its inception, Bitcoin took almost 11 years to hit the $20,000 price mark per coin. And this happened in 2017. After 22 days, the most popular digital currency surged an additional $20,000. And Bitcoin momentum continued to hold firm.

Sell-offs followed the rapid climb of Bitcoin back in 2017, thereby erasing the bulk of the gains this cryptocurrency had earned quickly. However, this cryptocurrency has not exhibited a similar trend recently. And experts say that several factors fueled the surge of tokens through 2020. What's more, they predict that these factors will keep boosting Bitcoin going to the future.

That's because platforms like http://bitcoin-profitapp.com make accessing, buying, and selling this cryptocurrency easier. And they keep emerging every day. Here are the main factors that led to a surge in Bitcoin's price and why this might never happen again.

Investors Feared Missing Out

Retail investors passionately powered Bitcoin's rally in 2017. However, public firms sparked the latest climb for the token. For instance, MicroStrategy initiated a chain reaction by purchasing Bitcoin worth $425 from August to September. And this move prompted more public companies to see Bitcoin as a reserve asset.

Other companies followed suit by investing large amounts of fiat money in Bitcoin. The price of this cryptocurrency began rocketing higher after Bitcoin's adoption by PayPal. This company announced that it would allow its users to sell, buy, and hold Bitcoin. And in July 2019, this token hit the highest level. That's because more investors considered its adoption by PayPal and other companies a significant step towards its widespread use.

But the subsequent Bitcoin price rise caused panic among institutional investors. Previously, fund managers balked at this token. The violent swings of Bitcoin prices made them fear missing out on possibly fantastic returns. Thus, they began investing some cash into this cryptocurrency.

Some institutional investors invested billions and millions of dollars into the Bitcoin market. And this has been critical in the meteoric rise of this token towards the end of 2020.


Inflation Hedges Demand

Some people see Bitcoin as having no connection with the coronavirus pandemic. However, the fallout of the health crisis has been crucial in supporting the prices of this cryptocurrency. Governments across the world have issued trillions of dollars in fiscal stimulus.

The fresh currency influx and easy financial conditions have improved Bitcoin's case as an inflation hedge. Bitcoin's limited supply and insulation from various policy decisions have made this cryptocurrency an alternative to hedge assets like gold.

The money printing that causes inflation has made more people search for and invest in hard assets. That's because they want something whose supply won't keep fluctuating.

Improved Legitimacy

Institutional investors and companies that want to invest in Bitcoin have given it legitimacy. Thus, investors do not see Bitcoin as an asset with murky uses. Initially, people that are unfamiliar with digital currencies thought they were associated with "nefarious activities".

However, the institutional funds' influx and PayPal's adoption have increased the legitimacy of this cryptocurrency. What's more, this has increased the interest of more retail investors in this digital currency. Ideally, the involvement of more prominent brands in Bitcoin activity and the implementation of more regulations will eventually make Bitcoin a mainstream asset.

Final Thoughts

The rapid increase in Bitcoin price prompted many investors to think about a bubble. However, this price surge is unlikely to happen as the cryptocurrency gets more adoption and usage. What's more, cryptocurrencies and blockchain technology are gaining growing interest across the world. And Bitcoin value is slowly stabilizing. Thus, such a surge in Bitcoin price is unlikely to happen again.