What’s going on with the Bitcoin price (BTC) right now hasn’t been seen since the crypto hype at the end of 2017. The price of a Bitcoin is climbing to a new record all-time high almost every hour and is currently quoted at 28,250 US dollars. On a weekly basis, the price is thus up by more than 17 percent. Why there is currently no stopping it and why the 30,000 US dollar mark could also be reached quickly.
The Bitcoin price (BTC) makes all other cryptocurrencies look old. No other digital asset is seeing as much fresh capital flowing into it as digital gold. With a market capitalization of over half a trillion US dollars, Bitcoin is reaching a dizzying height. For comparison, if Bitcoin were a nation, and you equated its market capitalization with GDP, it would currently be in 26th place. For example, Austria, with a GDP of $446 billion, would not be as heavily capitalized as Bitcoin.
Why is the Bitcoin price (BTC) rising unstoppably?
The reason why the Bitcoin price is unstoppable is simple. As we have explained many times before, institutional investors are now entering the market. The „big money“, i.e. hedge funds, insurance companies, family offices, etc., are now entering the market. The perception has turned 180 degrees. Whereas Bitcoin was previously perceived as more of a speculation, it is now considered among investment professionals that not having Bitcoin in your portfolio is a risk.
As in the traditional financial sector, these professional players determine how prices develop. For example, not only has Nasdaq’s Microstrategy bought Bitcoin for another $650 million, as CEO Michael Saylor announced via Twitter on Dec. 21, but so have several traditional investment houses.
Bitcoin demand is unstoppable
Whether it’s American insurer MassMutual (BTC investment: $100 million), hedge fund Guggenheim (BTC investment: $500 million), or most recently this week’s repurchase from crypto asset manager Grayscale (BTC repurchase: $542 million), institutional investors around the world are buying Bitcoin holdings on a virtually daily basis. Tight supply and rising demand are leading to a Bitcoin price that currently knows only one direction.
Private investors play only a minor role in this. For this reason, Bitcoin also outperforms most other cryptocurrencies, because the big money primarily flows into Bitcoin and not into small cryptocurrencies. This is also reflected in the sharp increase in Bitcoin market dominance, which currently stands at over 70 percent.
Asset distress and inflation expectations amplify bitcoin momentum
The flight into Bitcoin is reinforced by the prevailing investment emergency. For example, due to the massive monetary expansions of the European Central Bank (ECB), there are practically no positive interest rates on euro government bonds anymore. Even a ten-year government bond on heavily indebted Portugal means negative interest rates for investors.
A reversal of the ultra-loose monetary policy is not in sight, as this would massively endanger the stability of the entire euro area. It is becoming increasingly likely that there will be real economic inflation in the future in addition to the already prevailing asset inflation. The ECB is thus one of the biggest macroeconomic support factors for the Bitcoin price.
Bitcoin price (BTC) soon at $30,000?
Of course, no one can predict exactly when Bitcoin will reach the $30,000 mark, but it could happen very quickly. At the current rate, even this year. On the other hand, one must also state that the market is completely overheated. A healthy consolidation, in which the Bitcoin price also drops 20 – 30 percent from time to time, is absolutely within the realm of possibility. However, this should only last for a certain time, as it is no secret knowledge that the money of many institutional investors will not come until 2021. So support is provided.
2021: These trends are on the agenda
Bitcoin made a clear statement with its year-end rally: The cryptocurrency once attributed only to geeks and nerds has come of age and is finding its way into the institutional sector with broad mass adoption. But what are the issues on the agenda in 2021 besides pure bitcoin price performance? What underpins the recent price rally and what hurdles are there for Bitcoin and the crypto sector to overcome? What crypto and blockchain trends (even aside from Bitcoin) will define 2021? We have summarized the top trends for the year 2021 in the current December issue of Kryptokompass magazine.