Top 3 reasons why bitcoin Cryptocurrency Prices are on the rise
Cryptocurrencies, especially Bitcoin, are now being considered as safe-haven assets against market volatility and inflation. The current societal and economic climate also brings about a situation for people to hold less cash and stay hedged against market swings.
The cryptocurrency market has continued to witness a boom despite the global pandemic wreaking havoc on all significant economies on the planet.
Many crypto startups have emerged in the space during this pandemic to cater to the ever-increasing demand for Bitcoin and alike cryptocurrencies.
For instance, CoinSwitch Kuber recently announced the raising of $15 million Series A funding from leading global fintech investors such as Ribbit Capital, Paradigm, Sequoia Capital India, and prominent angel investor Kunal Shah from CRED.
Cryptocurrency market capitalization fueled by Bitcoin’s growth recently crossed the $1 trillion mark. Out of which, Bitcoin, has been on a bull run for quite some time and is responsible for roughly 69% of the total market value.
Just six months ago, the price of one Bitcoin was ~₹6,00,000, and today Bitcoin is trading for ~₹25,00,000, which is approximately a 400% rise in the price. Ether, the second-largest cryptocurrency in terms of market capitalization, crossed a new high of over ₹1,00,000 and rose over 1,000% in value in one year.
Similarly, many cryptocurrency prices have been on the rise, and investors are wondering why. Here are three reasons why cryptocurrency prices are rising:
1. Institutional Adoption
Cryptocurrencies, especially Bitcoin, are now being considered as safe-haven assets against market volatility and inflation. The current societal and economic climate also brings about a situation for people to hold less cash and stay hedged against market swings.
Recently, there has been a trend where public companies are converting their cash treasuries into crypto.
2. PayPal & Cryptocurrencies
In October 2020, the global digital payments company PayPal announced that it would be launching cryptocurrency buying and selling features on its platform.
The launch included four majorly traded currencies, namely Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. PayPal has also announced plans of allowing transactions to be made using cryptocurrencies.
PayPal is known to have 350 million users who will now be capable of adopting crypto as a payment means. Also, its 30 million merchants will have the option of receiving payments in crypto.
PayPal was one of the critics of cryptocurrency as a sustainable currency. Now it is one of the biggest names jumping on the bandwagon. Along with others and PayPal’s support, there has been more demand for the asset class, thus contributing to its price rise.
3. Bitcoin Halving Driven Scarcity
It is not new that most cryptocurrencies in the market have a limited supply. Bitcoin is also one of them. This year the third Bitcoin Halving took place.
Bitcoin halving is an important event in the Bitcoin network that happens every four years.
Bottom Line
If the rising prices in the crypto market have got you thinking that it is too late to invest in cryptocurrencies, understand that this is just the beginning.
With more countries seeking to regulate the market, cryptocurrencies will become mainstream.
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Top 3 reasons why bitcoin Cryptocurrency Prices are on the rise. was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.