Bitcoin has finally surpassed its previous record and set a new record after spending the past three years on a bearish trend
It took almost three years, but Bitcoin reached another historic record. Bitcoin has surpassed its previous record of $ 19,783. The leading cryptocurrency recorded a new historical record of $ 19,900 yesterday.
By trading at $ 19,900 per currency, Bitcoin broke the all-time record set in December 2017. Investors who ventured into the market after the 2017 bull run are finally seeing their investments pay off, while the new ones market participants would feel validated for their investments in Bitcoin and cryptocurrencies.
Several skeptics have lowered Bitcoin’s status as an investment tool, pointing out that it struggled to replicate its performance in 2017, despite having a favorable macro scenario. However, several factors contributed to the current rally.
The halving event, which took place in May this year, was attended by countless investors in the market. Historically, halving events have been followed by a bull run and this year was no different. The halving event saw the reward for miners cut in half, from 12.5 BTC to 6.25 BTC per block.
Despite starting the year strongly, Bitcoin lost more than 50% of its value in March in what is now known as “Black Thursday”. The coronavirus pandemic hit the financial markets hard during that period, and Bitcoin was similarly affected.
Bitcoin rebounded and has risen more than 400% since its decline below the $ 4,000 mark in March. Another critical factor that played a role in the rise of Bitcoin is the unprecedented spending by central banks around the world, while trying to cushion the effects of the coronavirus. An increasing number of people have started to look to Bitcoin as an investment tool to protect themselves against the potential inflation of monetary policies. People had more money to invest in cryptocurrencies as they received stimulus and other packages from governments.
However, some analysts believe that the main reason for the current rise is the entry of institutional investors in the market. Over the past three years, several institutional companies have changed their stance and invested billions of dollars in the cryptocurrency market.
Major institutional investments include MicroStrategy’s $ 425 million Bitcoin investment, $ 50 million Bitcoin Square purchase, PayPal’s cryptocurrency service offering and, more recently, Guggenheim’s plan to invest $ 500 million indirectly in the market.
Some analysts predict a more prolonged and sustainable rise, suggesting that the price of Bitcoin may soon exceed the $ 20,000 mark.