Bitcoin crossed the $40,000 mark, setting a new record in a short time, and its market value rose above $760 billion.
Bitcoin crossed the $40,000 mark in a short time, and its market value rose above $760 billion, leaving analysts and investors dazed and worried about a potential market bubble.
It took almost 11 years to come Bitcoin arrives It reached $20,000 for the first time since 2017, and just 22 days later the world's most popular cryptocurrency rose another $20,000 and its momentum is still going strong so far.
The currency’s rapid rise in 2017 was followed by a flash sell-off that quickly erased the bulk of the gains made, but no such trend has emerged this time, and experts say a combination of factors fueled the crypto-token’s boom into 2020, and will likely continue to fuel it In the new year.
Bitcoin sees more institutional investment
As enthusiastic retail investors fueled the bitcoin rally of 2017, major companies and financial institutions drove the latest rally in the token. It started with MicroStrategy when it reacted well to crypto, buying $425 million worth of bitcoin in August and September, unlocking the move. The door for other public companies to buy cryptocurrency as a viable reserve asset.
Square followed suit in October with a $50 million purchase, however, and prices didn't begin to skyrocket until electronic payments giant PayPal adopted bitcoin, with the company announcing on October 21 that it would allow hundreds of millions of its users to buy, sell and hold the cryptocurrency, which jumped after the announcement to Its highest level since July 2019, as investors saw adoption as a major step forward for widespread use of the currency.
Investors believe a move to it is a good reserve asset, knowing that there is a limited supply of bitcoin so many flock to snap it up before its price goes up too much.
The subsequent rise in its price sent institutional investors into a fray, and fund managers who had previously refused to use the currency due to its violent price swings feared they were missing out on solid returns, so they started converting some funds into cryptocurrency.
Institutional investors have since poured billions of dollars into the cryptocurrency market, their participation playing the biggest role in the coin's skyrocketing rise through the end of 2020.
Crypto market cap exceeds $1 trillion
Another key historical moment for the cryptocurrency market was when the total capitalization exceeded $1 trillion, after Bitcoin broke through the $40,000 level and other major cryptocurrencies hit record highs.
Investors in the cryptocurrency market believe that the victory of the US Democrats should be the next impetus for the growth of the crypto market, generous economic stimulus and the printing of new dollars should be the basis for large-scale asset diversification among institutional investors, at the moment Bitcoin is increasingly being advertised as the equivalent The digital currency of gold, but in fact, it should be remembered that current investments in the benchmark cryptocurrency are a temporary waiting area for funds at a time of increased market liquidity and inflated stock and bond prices, non-professional retail investors still do not fully trust the current market, but at some point , will move them to a feeling of fear of missing opportunities.