Bitcoin’s recent fluctuating price corrections (BTC) may conjure up images of the 2017 crash in your mind, or maybe even the crash caused by COVID-19 back in March this year. But the fact that Bitcoin reached $ 20,000 for the first time in history is no reason to sound the alarm.
Despite the fact that the world’s most valuable cryptocurrency price is up more than 225% this year, the current bull run we live through is different from the Bitcoin mania we saw back in 2017. Far from it. There are four key reasons for this:
- Institutional investment in space is at an all-time high.
- There is very little mainstream media coverage catapulting the price this time around.
- Central banks and governments are starting to see the writing on the wall.
- Retail investors in emerging markets are investing in what they hope is a revolution.
These four reasons don’t just apply now; they will all continue to play a role in Bitcoin’s future growth. Consider this your news flash. Bitcoin no longer lives in a bubble, and soon the traditional financial world is just going to burst.
Related: Time is our best friend: Bitcoin’s 12-month track to $ 100K
Institutional investment in Bitcoin skyrockets in 2020
Bitcoin is not just for young, tech-savvy millennials anymore. Governments, central banks and large corporations can no longer ignore its value. That’s exactly why a few important investments from major Bitcoin fans grabbed the headlines in 2020.
Related: Crypto could save millennials from the failed economy
A publicly traded business consulting firm called MicroStrategy now owns 38,250 Bitcoin, which is currently worth just under $ 640 million. The BTC was originally purchased for about $ 250 million earlier this year. Thanks to the massive scale of the purchase and its profitability to date, the company’s CEO, Michael Saylor, has become quite the Bitcoin evangelist. Apart from large investment trusts, no company owns more Bitcoin than MicroStrategy.
Related: There are corporate Bitcoin treasures here, which can only mean good things
Square CEO Jack Dorsey joins Saylor and his company in their enthusiasm for Bitcoin. Dorsey bought about $ 50 million worth of the cryptocurrency for his company. More important than that $ 50 million investment, though, is that estimates suggest that PayPal, the Square payments and co-payments competitor, is swallowing more than 70% of newly mined Bitcoin that n goes into circulation. Square lets customers use cryptocurrency as payment; PayPal lets customers and merchants buy Bitcoin directly from their PayPal accounts. Both portals are currently creating the windfall for Bitcoin market capitalization.
Related: Will Paypal’s crypto integration bring crypto to the masses? Experts answer
Retail investors are no longer just following the mainstream media trend
In 2017, it would have been difficult for you not to hear about Bitcoin. Whether a friend or family member talked to you about it at Christmas, or heard about it in the news or in TV commercials, the truth is that almost all major media covered the current price boom.
Fast forward to the present, and you can look at Google Trends to see that searches for the word Bitcoin have been trending at a high level lately, but apart from investment-specific TV programs, you don’t hear about Bitcoin in the mainstream almost as much stream, with some exceptions of course.
This means we have reached a new milestone for adoption. More and more people know about cryptocurrencies than ever before, and now they are following the asset class more closely.
Related: Bitcoin is the best treasury fund asset that humanity has ever had
Central banks and governments have no choice but to join the party
Russia, China, Canada, the European Union and many other countries are either already working on their own digital money at the central bank or issuing white papers detailing their intentions to do so. Moving away from paper money and plastic credit cards is the natural next step for the world as payment technologies continue to evolve. But as crypto enthusiasts know, a digital currency built on a blockchain owned by a central bank or government is not the same as one built on decentralized technology.
Related: The central bank’s digital currency has died in the water
This is clearly a sign that the powers in the old financial world are seeing the writing on the wall. They do everything they can to protect a system that favors those in control. But CBDCs and stricter government regulations will only continue to blur the lines between government-backed digital currencies and Bitcoin. It is only a matter of time before society chooses the latter over the former.
Retail investors in emerging markets are counting on the Bitcoin revolution
Not only is Google searching for the word Bitcoin at its highest ever, but the two countries currently experiencing the highest surge in search volume are Nigeria and South Africa, both developing nations with unique challenges. Search volume seems to be only a sign of new crypto investors doing research; it results in large amounts of capital flowing into space.
Marcus Swanepoel, CEO of Luno – a crypto exchange serving emerging markets – recently tweets that purchase volumes on the company’s exchange have tripled among retail investors in Nigeria, South Africa, Malaysia and Indonesia.
Related: Emerging technologies can change Africa’s financial landscape
While institutional investment is certainly a driving force, pushing Bitcoin’s value higher, people around the world, who can’t trust the economies they used to rely on, are putting their capital to work and are betting on a revolution Bitcoin is going to change. their future for the better.
The future is bright for Bitcoin
Don’t be mistaken. There are certainly many challenges yet to come for Bitcoin and other cryptocurrencies. This month, Coinbase announced that margin trading should be stopped because of a change in government regulations. The news reminds us that governments will continue to try to regulate everything, and detractors will continue to deny the fundamental value of Bitcoin.
Still, the future for Bitcoin and all other cryptocurrencies is bright. Cameron and Tyler Winklevoss believe Bitcoin will be worth more than $ 500,000 a penny within the next 10 years. An advisor at Citibank sees Bitcoin $ 300,000 much faster than that.
Those numbers may seem like they are far too optimistic, but remember, it wasn’t that long ago that $ 25,000 Bitcoin seemed impossible, and now we’re almost there. Except from now on, the path to mass adoption is no longer about educating new investors, it’s about getting people, corporations and, ultimately, governments to finally put their capital where their crypto … and they will all do it faster than you think.
This article does not contain investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Mark Binns is the CEO of BIGG Digital Assets Inc. He believes the future of crypto is a safe, compliant and controlled environment. He first encountered crypto in 2013 and was immediately hooked. As CEO of BIGG Digital Assets, Mark oversees Blockchain Intelligence Group, maker of Qlue, BitRank and Netcoins.