In this last quarter of the year, Bitcoin has been the author of great successes, the cryptocurrency went from a price of $10.000 USD to exceeding $18.000 USD in less than 2 months, impacting everyone in the crypto space and attracting new investors. But what is behind this growth?
The price of Bitcoin (BTC) It is well known for its ups and downs. Some call it a "big bubble", others simply speculation, but those of us who have been educating ourselves about this wonderful technology for some time know that there is much more behind it that adds value. The enormous potential that Bitcoin contains, to give value to society as a technology, as a decentralized system, as an investment asset, as a reserve of value and often as a medium of exchange, is what supports its price.
Now, in September, Bitcoin maintained a price close to $10.500 USD, approaching and exceeding the $11.000 USD barrier several times, but then returning to its previous value. In the month of October the panorama was different, as a bullish rally began that has not stopped to date, although traders are beginning to predict a large correction in its current price.
In the second week of October Bitcoin began to grow, going from being worth $10.600 USD on October 8 to $11.080 USD on the 9th and it didn't stop there. On October 10, the value of Bitcoin was $11.350 USD and a few days later it exceeded $12.000 USD. And so on until reaching the current date, where its price ranges between $17.900 USD and $18.000 USD and even exceeding $18.300 USD per unit.
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Institutions come to Bitcoin
The recent run or bullish momentum that Bitcoin has sustained these days is being caused by several factors; Among them and according to several analysts, is institutional adoption that continues to grow every day. The involvement of several major institutional players in the Bitcoin ecosystem and the cryptocurrencies, is driving a feeling of confidence and stability in the market, attracting new users and investors.
One of these actors is undoubtedly Paypal, which recently opened operations for the purchase, sale and storage of Bitcoin and other cryptocurrencies through its payment app. When this financial giant confirmed its new cryptographic (i.e. cryptocurrency) services, the price of Bitcoin jumped from around $11.900 USD to $12.800 USD, showing a growth of more than 6% at that time. Likewise, the entry of MicroStrategy and Stone Ridge into the Bitcoin ecosystem with million-dollar investments in this cryptocurrency and GrayScale's increase in its BTC holdings that exceed 500.000 units are major influences on the bullish movement that has potentially raised the price of Bitcoin.
For its part, JPMorgan has also helped forge the environment of trust and maturity that exists around this crypto, with its recent positive valuations for Bitcoin as an investment asset and store of value. Analysts at this financial institution, one of the oldest in the United States, assure that Bitcoin can be a better alternative to gold, citing institutional investment as one of the main causes that led to the improvement of the returns of this cryptocurrency compared to the precious metal. in the last month.
A growth that could be seen coming to the ecosystem
Fidelity Digital Assets, a renowned American company specialized in asset management and pension funds, published a report in June where he revealed that institutional sentiment and confidence in cryptocurrencies was growing significantly. Fidelity's statements were derived from a survey of more than 800 institutional investors in the United States and Europe, where almost 80% said they found something attractive in investing in cryptocurrencies.
“Digital assets are gaining popularity and appeal among institutional investors. “Almost 80% of investors surveyed find something attractive about this asset class.”
Likewise, the survey applied revealed that 36% of investors already maintained investments in digital assets and that 6 out of 10 believed that these assets and cryptocurrencies had a place in their investment portfolio, due to their lack of correlation with other classes. of assets. Given this optimistic reality, the company assured that an upward movement was about to arrive.
Market rebound due to restrictions in China
Now, institutional investment is not the only factor that has an impact on Bitcoin's bull run. Some analysts are pointing to recent restrictions on China's major cryptocurrency exchanges, which are preventing the trading of digital assets, as another cause of this bullish sentiment. In the Asian nation, it appears that Bitcoin miners are currently unable to exchange or sell their BTC for the cash they need to cover their operating expenses, causing a low supply of the cryptocurrency in the markets.
Let us remember that the Asian nation concentrates much of the Bitcoin mining power, which means that the majority of the network's miners are located in this country. Furthermore, after halving that took place in May, the issuance of bitcoins was reduced by half, so currently only about 900 BTC are mined daily. Thus, faced with an increasingly reduced issuance, a low market supply and a demand that seems to be growing at an institutional and also retail level, the price of Bitcoin is rising to surprising levels.
The trading firm in the digital economy, QCP Capital, noted on his Telegram channel that this lack of Bitcoin supply is contributing “extremely well” to the current bullish trend.
Blocking of accounts and banking products, now restrictions on exchanges
The situation experienced by miners in China began to be felt in June, when the government blocked the bank accounts and cards of those who are dedicated to mining cryptocurrencies. By then, the state required miners to demonstrate the origin of their funds, to prove that they were legal activities. Now, these hostile measures have been magnified, making the exchange of Bitcoin and other digital assets such as Tether (USDT) became a complete and complex challenge.
In relation to this, QCP Capital went on to say:
“Mining pools were selling large amounts of bitcoin in early September through exchanges, but this came to an abrupt halt following the arrest of big exchange bosses such as Star Xu (OKCoin) among others.”
The company mentions that the restrictions are leading several miners to cease operations as well as several of the OTC businesses and exchanges that operate in the country. This may lead many miners to leave China and look for other jurisdictions from which to activate their operations. Curiously, thanks to the rise in Bitcoin prices caused by these situations, miners are receiving higher profits for their work than before the May halving, when the mining reward was 12,5 BTC per block.
How long will this race last?
QCP Capital assures that this is an exaggerated bullish movement, but that it found its support in a positive financing rate. However, a market correction is coming in the coming days, to bring Bitcoin to a more modest price.
Lastly, a downward correction in the price of Bitcoin is no cause for panic nor disappointment, since cryptocurrency contains enormous potential, which even today, in a globalized world connected to the Internet, is unknown to many in society.
At Bit2Me we strive every day to bring this potential to as many people as possible and help them discover a universe accessible to all and without censorship, capable of giving them back control over their own finances. And as the number of users and investors in Bitcoin grows, the market will mature and become more solid and stable, allowing the value of the cryptocurrency to continue growing. Furthermore, we must not forget that Bitcoin has great qualities, which far surpass fiat money and gold and that it is a limited emission asset that is becoming more scarce every day; factors that also help its value appreciate.
At press time, Bitcoin is worth $17.965 USD, and has a market capitalization of more than $332 billion.
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