6 Reasons Why Bitcoin Just Hit an All-Time High Price

Golden Option Blog

Bitcoin surged to a new all-time high price of $19,888 on Dec/1/2020, extending its year-to-date rise to an astounding 170% during 2020 that has seen tumultuous swings in global markets.

Here are the six reasons why the top cryptocurrency has moved higher :

Underlying Fundamentals.
Hedge fund managers had a longer view.
Institutional interest .
The PayPal effect.
Analysts are positive.
Ok on OKEx.

Underlying Fundamentals

The value of the dollar is decreasing constantly as the Federal Reserve keeps on printing new money to help finance the government’s Coronavirus-related emergency stimulus bills. The Fed and most of all central banks around the world keep on printing money to bring back its economies and markets to stable condition.

The central bank has thus far created more than $3 trillion of new money in 2020, or more than three quarters of the entire amount created during its prior 107-year history. Thus with the law of supply and demand, if there's more supply of money its value goes down. And you can see this in the chart of the Dollar index (DXY). Hence the rise of cryptocurrencies such as Bitcoin, which are scarce in volume.

This same fundamental is also the reason why there is rise in asset prices of precious metal like Gold. The Image below is the chart of Dollar index (DXY) on the same day of publishing this blog from Investing.com.

Hedge fund managers had a longer view.

Many well-known hedge fund managers are increasingly calling bitcoin a long-term investment. Many financially influential people are talking about bitcoin and why it might rise based on the fundamentals. Some of them talk that they might have just missed the bitcoin bull run in their podcast and stuff.

Legendary managers, including Paul Tudor Jones II and Stanley Druckenmiller, have recently said the cryptocurrency’s price could rise as the Federal Reserve keeps printing more money.

Institutional interest

According to a Nov. 20 report, some institutional investors are buying into the publicly traded Grayscale Bitcoin Trust (GBTC). The report comes from analysts at JPMorgan Chase citing that the institutional investors are taking on Bitcoin exposure. (Note: Grayscale is a unit of Digital Currency Group, which owns CoinDesk.)

Guggenheim, a money manager that oversees $233 billion for investors, also said in its regulatory filings that its Macro Opportunities Fund might allocate up to 10% of net assets to GBTC.

Another factor also happens that the outstanding number of bitcoin futures contracts is surging on the Chicago Mercantile Exchange, which is seen as another sign that big investors are using commodities markets to speculate on the cryptocurrency’s price, according to the JPMorgan report.

The PayPal effect.

PayPal (PYPL) is allowing customers – some 346 million active accounts – to buy bitcoin. Now this is a huge news as PayPal is a big worldwide online payments system and its acceptance of bitcoin could mean a lot to its customers. The person-to-person payments network announced Oct. 21 it would let customers buy, sell and hold bitcoin. According to the company, the cryptocurrency will become a “funding source for purchases at its 26 million merchants worldwide.”

Here's a little motivation for you from our Golden Option Instagram Page.

Analysts are positive

Wall Street analysts have made positive comments over the past few days. AllianceBernstein, a $631 billion money manager, published a report saying the post-pandemic economic environment could create a role for bitcoin in investors’ asset allocation, as per report by CoinDesk on Nov 30.

Inigo Fraser Jenkins, co-head of the portfolio strategy team at Bernstein Research, wrote that when it comes to a role in hedging against inflation, “the driver of bitcoin is similar to that as for gold.” Which I have already explained above in the fundamentals, it is driven by the Fundamentals.

Ok on OKEx

The bitcoin market last week overcame a major source of concern – bitcoin outflows from one of the world’s biggest cryptocurrency exchanges, OKEx. Some traders and analysts had speculated the end of a five-week suspension of withdrawals might translate into liquidations that could put selling pressure on the bitcoin market. Data extracted from the cryptocurrency’s underlying blockchain network showed some 24,631 bitcoin, worth $500 million at current prices, flowed out of the exchange in the 24 hours after the suspension was lifted last week.

But bitcoin’s price action shows the market shrugged off the news, along with other negative developments, such as rumors the U.S. Treasury Department might be considering onerous cryptocurrency regulations. Traders also appeared to ignore data showing some large bitcoin traders – known as “whales” – might be preparing to dump their holdings in response to the cryptocurrency’s price rise.

Conclusion.

So these are the Six reasons I think why the top cryptocurrency has moved higher. There are tremendous opportunity on the cryptocurrency and the blockchain sector. If you want to know more about bitcoin here's another blog "The Reason Why I Am Buying BTC & XRP Now". I hope you found some value from the above points and hope you invest wisely.

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