A few days back, we reported the mechanics of bitcoin gaining over $1,000 on a weekend. While many market analysts and investors were still digesting this surge in bitcoin value over a weekend, the news that it has already crossed $8,000 mark has left them only more surprised. Nevertheless, the most important question that whether or not this rise in bitcoin value is here to stay remains largely unanswered. We broke down major factors, as identified by different experts and analysts, for this sudden surge in bitcoin value into the following points.
Bitcoin As A Medium Of Investment Diversification
In another earlier article, we also discussed how institutional investors are becoming keener in digital currency investment as a bid to diversify their investment portfolio. This attitude has only increased manyfold amid recent US-China trade war, resulting in a surge in bitcoin value, as bitcoin remains the biggest cryptocurrency.
The Aftermath of ‘Hash War’
Back in Oct 2018-onwards, the market was flooded by bitcoins due to intensified ‘hash war’. This decreased the bitcoin value, as investors’ interest in cryptocurrency remained unchanged at that time. A considerable amount of smart money also made its way into bitcoin to benefit from relatively undervalued cryptocurrency. After surviving through the crypto winter, many crypto projects are now heading towards materialization.
Wider Acceptability And Legitimacy
People have been reluctant to invest in cryptocurrency due to legal and acceptability issues in the past. However, blockchain technology is quickly gaining widespread recognition among investors as well as many governments. This has prompted more investors to consider cryptocurrencies as a proper mode of investment. Moreover, retail giants, such as Amazon, eBay, GameStop and Lowe’s among many others have expressed a desire to accept bitcoin as a mode of payment.
Facebook Is Also Making Moves
As per recent news, Facebook is actively looking to hire more blockchain develops, expand its London office and seek support from some of the prominent Silicon Valley investment firms. These activities have signaled a larger plan than merely a cross-border payment system, as it was thought initially, and it has resulted in a positive sentiment regarding crypto in the market. Moreover, Fidelity Investments’ crypto trading is expected to go live within the next few weeks that could result in hundreds of thousands of new crypto customers in the near future.
While the future cannot be predicted with certainty, especially related to the uncertain market of crypto-trading, analysis of the above factors suggests that this surge in bitcoin value is unlikely to vanish in the near future.