Bitcoin rally continues: cryptocurrency tops $ 32,500 mark
No time right now?
On New Year’s Eve, Bitcoin just failed to hit the $ 30,000 mark – now it’s done. On Saturday afternoon, the Bitcoin rate on the Luxembourg trading platform Bitstamp rose to over $ 32,500.
With the recent increase, Bitcoin has become more expensive by almost $ 3,000 or around ten percent since the beginning of the new year. The stalls may differ on trading venues other than Bitstamp, as there is no central Bitcoin trade.
With the pandemic year 2020, of all times, the cryptocurrency Bitcoin experienced an unprecedented rise. What seems astonishing at first glance is understandable at second glance and even benefited from the pandemic.
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XRP with problems, BTC unimpressed
Because at the beginning of 2020, Bitcoin was still $ 7,200. Since then, the price has more than quadrupled overall, despite an intermittent crash to $ 4,700 in March.
Since the end of November – when Bitcoin exceeded its previous record of the beginning of 2018 – things have risen sharply. On December 16, 2020, the cryptocurrency exceeded $ 20,000 in value. Since then, Bitcoin has grown by more than $ 10,000.
It should also be astonishing that the current problems surrounding the fourth-largest crypto currency XRP have so far not had any impact on Bitcoin. XRP has been in free fall since the US Securities and Exchange Commission intervened against XRP inventor Ripple. Various exchanges and traders have even delisted the currency.
Corona crisis acts as a catalyst
Bitcoin, on the other hand, is experiencing an uninterrupted influx of investors. And this shows the connection with the corona crisis. Confidence in institutionalized currencies is falling. In the US there is growing concern about accelerating inflation. Across the world, ever-increasing corona aid packages are fueling this fear.
This can be seen not only in Bitcoin, but also in the prices of precious metals. Gold and silver are experiencing a similar run. Experts blame institutional investors in particular for the current rise in the BTC price, who want to protect the assets entrusted to them from devaluation. In the USA in particular, companies, insurance companies and funds are increasingly relying on the transfer of liquid funds to Bitcoin.
The announcement of the payment service PayPal that it would allow its customers to pay with Bitcoins also resulted in an enormous surge in demand.
As demand increases, shortages drive prices up
The effects on the Bitcoin rate are understandable. Because the market capitalization of Bitcoin is currently at a total of 550 billion dollars from 18.6 million Bitcoins. Tesla alone, at around 600 billion, already has a higher value than all BTC together.
So the offer is extremely limited. Every business administration student learns in the first semester what happens when the demand increases with a limited supply that cannot be expanded quickly. Prices are exploding.
The financial experts of the US bank JP Morgan have determined that there is currently a BTC demand from institutional investors in the order of around 600 billion dollars. From the institutional environment alone, there is more BTC demand than there is anywhere in the world. This means that the Bitcoin price should only know one direction.
