In the wake of the Covid-19 pandemic, the global economy was facing a major meltdown. Many countries have dived into their reserves and some even borrowed from other countries. Unemployment reached a record high and traditional assets in the stock market crashed. Bitcoin and altcoins became haven investments that didn’t just serve as the perfect store or value but as a sure way to generate record profit.
Bitcoin’s Epic Journey From $10,000 to $40,000
Over the last decade, Bitcoin has been one of the most controversial assets in the world. Millions of people believe that Bitcoin is the future of money but there are still those who aren’t convinced that the cryptocurrency will last indefinitely. The price action of the token over the last few weeks has proven many non-believers wrong and many of them have started purchasing the cryptocurrency.
From January to September 2020, Bitcoin traded in the $9,000-$11,000 range reaching higher highs and lower lows but never leaving that level. In September, the token started gaining momentum and continued to move higher until it surpassed the 2018 high of $19,000 plus. On the weekend of Christmas, the world’s largest cryptocurrency per market capitalization moved as high as $28,000. It continued to rise throughout the holidays.
On January 2, Bitcoin was trading at $30,000. The higher the token got, the more investors purchased it. However, when short-term traders took out their profits, the token corrected briefly before resuming its upward surge to $40,394 on the 6 of January setting an amazing record. At its new all-time high, Bitcoin had a market capitalization of over one trillion. Since then, the token has corrected lower and found relative stability in the $33,570.48 to $35,860.48 range.
Bitcoin’s Performance and the Covid-19 Pandemic
In the past, there have been a lot of bold Bitcoin price predictions. Many popular Bitcoin traders have predicted that the token will surpass everyone’s expectations and reach record highs. As stated above, the token is now a haven asset during the pandemic as fiat currencies and global economies face challenges. The rapid surge in institutional interest in this pandemic era pushed the token to the stratosphere and propelled retail investors to buy in before it’s too late.
In the last quarter of 2020, there was a surge in institutional interest on the Bitcoin charts. One of the most significant investments came from PayPal and Ruffer Investment Management. In November, this asset management firm purchased $745 million worth of Bitcoin. This is about 2.7 percent of the firm’s assets and it proves that institutional investors can no longer ignore Bitcoin. More investments will follow in the months to come because the coronavirus pandemic has made the path clear for Bitcoin investors.
As of August 2020, more than 20 institutional investors filed the paperwork announcing their institutional interest in Bitcoin and other cryptocurrencies. These firms invested in Grayscale Bitcoin Trust (GBTC), a subsidiary of Grayscale Investments, LLC. Some of the institutional investors are big players like Ark Invest and Horizon Kinetic. New investors like Corriente Advisor, Rothschild Investment Corporation, and Addison Capital have also invested in GBTC. Combined with the latest investments and others in the pipeline, Bitcoin is proving more resilient than ever. Investors at all levels are beginning to see that Bitcoin will be one of the most efficient forms of investment in the future.
When gold and other major assets were faced with uncertainty, Bitcoin BTC increased in price. Social media was on fire for days. People were selling properties and other major assets just to divert their funds to Bitcoin. Despite the surge in price, they continued to purchase the cryptocurrency hoping that it would keep rising allowing them to make record profits. At the same time, new Bitcoin price predictions were being posted all over the Internet.
What Does the Future Hold for Bitcoin?
It’s not clear how long the pandemic will last but Bitcoin BTC is most likely going to keep holding steady for as long as it lasts and beyond. The co-founder of Nexo, Antoni Trenchev, said that “Bitcoin has and will continue to defy expectations and doubters”. Trenchev isn’t the only one who believes that Bitcoin has a bright future. Chamath Palihapitiya of Social Capital said that Bitcoin is most likely going to cross the $100,000 mark in the next five years. After that, Palihapitiya is convinced that the token will move as high as $200,000 within the next decade. So, people who are currently buying Bitcoin BTC should buy and hold.
Bitcoin is a volatile asset and this volatility can be a blessing or a curse. In the years to come, no one expects the token to rise or fall in a steady line. Instead, they should expect lower lows and higher highs at intervals. It is a high-risk, high-reward investment for retail and institutional investors alike. This is why even software engineers that host sites like Computersciencehero.com and Bootcamprankings.com are buying Bitcoin aggressively.