Top-5 factors to drive the BTC price: is it worth hodling?
Some two years ago the skeptics called Bitcoin a bubble that has no future; meanwhile, the year 2020 had already proven these statements senseless. Bitcoin continues to drive the crypto market, while its dominance is 66%. The current Bitcoin price surpassed the mark of $27 000, moving towards the new all-time high. Which are the key-note factors to impact this movement?
#1. The institutionalization of Bitcoin
In 2020 institutional investors started to add BTC to their investment portfolios, understanding the future perspectives of the oldest crypto asset. According to the Grayscale Investments survey study, more than 55% of US investors wish to purchase Bitcoin. While talking about the whole world, 36% of all institutional investors consider BTC among the promising investment instruments.
Furthermore, the experts predict top-rated corporations like Amazon, Apple, Tesla will invest in Bitcoin in 2021, while some giant companies (JPMorgan, IBM, Walmart) are expected to own some crypto addresses, based on independent researches.
Besides institutional investors, the BTC whales’ “population” is on the rise what affects Bitcoin price growth, as well. On October 25, the number of Bitcoin whales reached its all-time high at 2 231 addresses.
#2. Extending of payments
Applicability has a powerful impact on Bitcoin price; hence, the more merchants accept BTC, the higher perspectives this crypto gets. According to the HSB survey, 36% of U.S. small and medium businesses accept Bitcoin payments. As for the other countries, more than 50 million companies have already added BTC to the list of possible payment methods.
There are cities including Amsterdam, Buenos-Aires, Ljubljana, Zurich, etc. where people may purchase all goods and services for Bitcoins. The expansion of the list drives Bitcoin price higher.
#3. Bitcoin is better than other investment assets
Which investment instruments have been always understood as reliable ones? Stocks and gold, right? The year 2020 shows these assets are quite risky, putting digital assets in a favorable light. More private investors are interested in how is Bitcoin price determined, because the first crypto shows better results.
Dow Jones index growth is just 2.17%, S&P 500 – 10.14%, gold prices increased by 22.84%, while Bitcoin growth is 148%.
#4. The road towards mass adoption
What drives Bitcoin price the most? Legislative aspects, undoubtedly. For many years there have been no clear regulations referred to crypto-assets, while parliamentarians waited for the future of digital currencies. At present, the governments understand that cryptocurrencies are powerful instruments, competitive enough to traditional financial instruments.
Many countries have already enacted some laws, enabling crypto assets with the same rights as fiat currencies. Furthermore, the EU is ready to adopt the MiCA regulations.
#5. Trading volumes
Trading volumes determine the liquidity of assets; therefore, such an index affects the price of Bitcoin. On April 30, BTC 24 hours trading volumes set a new record of $72 billion; hence, private investors are interested in Bitcoin. While talking about the year 2019, the average 24 h trading volume is $18 million.