Bitcoin has been one of the first cryptocurrencies to be unveiled to the public. Having an early start definitely benefitted Bitcoin as it was handed an advantage in the markets. The 2017 bull run had benefitted everyone who had taken the risk of jumping on the hype train earlier on. Despite that, Bitcoin mostly continued to be a trading commodity for the more unstable markets – something most common folk would hesitate to get it. In 2020, however, things have changed for good. We might be seeing one of the greatest heights to which Bitcoin (and in turn, the concept of cryptocurrencies as a trading medium equivalent to money) might have risen.
1. Interest from Leading Commercial Firms
Perhaps the most important reason for Bitcoin’s meteoric rise as of late has been the insane interest placed in it by large commercial firms and enterprises. PayPal has been seen rushing to acquire large volumes of Bitcoin for supporting transactions in cryptocurrencies. PayPal’s enthusiasm has been matched equally by Square’s Cash App – another prominent player in the domain of online payments. Even as we speak, both PayPal and Square’s Cash App (and many other competitors in a similar domain) have been building up the infrastructure needed for the cryptocurrency transactions of the future. Support from big organizations was lacking in the bull run of 2017, and 2020 might just be a different scene completely.
2. Widespread Preaching and a General Increase in Awareness
Awareness about Bitcoin and cryptocurrencies has been spreading at a (near) “alarming” rate. Reddit, Twitter, and Facebook are full of tech nerds preaching about cryptocurrencies as the next phase of the evolution of currency in humankind’s evolution timeline. The increased speculation about Bitcoin pushes the price even further – pulling in more money for the folks that had put in money earlier. As cryptocurrencies are predicted to be “money-making machines” of the future, more common people are attracted to the markets to make some “easy” money. The big thing that Bitcoin was lacking back when it launched was mass appeal – and that’s exactly what it is getting right now. As more people start transacting in volumes, cryptocurrencies will start being regularized as modes of payment at leading eCommerce stores and maybe even brick-and-mortar retail stores in the future.
3. Decrease of Interest in Gold and Silver
The COVID pandemic has spread havoc in the value of gold and silver and all stocks associated with it. The damage done to international economies has reduced the purchasing power of people around the globe. As more time progresses, governments will be focusing more on printing additional currency to help fund their relief activities. COVID had affected businesses around the world, and relief activities need to be pumped with raw cash. This further reduces the value of actual currencies around the globe – particularly the US dollar, the most highly valued currency on the globe. People no longer rely on gold and silver as “reliable” investments. With an increasing amount of hype being generated about cryptocurrencies being unaffected by the pandemic, more people are selling out for the new Bitcoin gold rush.
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4. Interest of Leaders in the Stock Market
Bitcoin has managed to sway the investors in a majority of first-world economies. Wall Street has already expressed interest in Bitcoin as the new “liquid gold.” High-profile bulls have started backing Bitcoin in a more significant way, putting some of their assets to help push the cryptocurrency value higher.
5. Stability in the Value of Bitcoin
One of the main reasons why Bitcoin continues to sway the market is because of the relative stability in its value as compared to other cryptocurrencies. More liquid cryptocurrencies like Ethereum, Litecoin, Ripple, and Dogecoin haven’t had a good run as of late. The main reason behind a declining interest in these cryptocurrencies is a reduction in the speculation in their values. The fact that Ethereum and Litecoin have failed to maintain their bull run throughout the COVID pandemic has further turned away potential investors. The only alternative for these investors lies in Bitcoin – the cryptocurrency which is still soaring at relatively dizzying heights.
6. Widespread Adoption of Bitcoin as a Mode of Payment
Businesses have started heavily investing in Bitcoin. Robinhood or Fidelity will roll out Bitcoin as a payment method pretty soon. At this rate, we would also be seeing Bitcoin as a payment method for eBay or Airbnb, and even for retail stores like Walmart, Target, Subway, and so on. Greater use of Bitcoin (and other cryptocurrencies) further increases the incentives to people who want to put money into it. The existence of relatively safe ways for people to invest in Bitcoin – like the Grayscale Bitcoin Trust, the largest cryptocurrency exchange on the Internet for investors new to Bitcoin, as well as a hoard of reliable cryptocurrency exchanges – have increased people’s trust in the “digital currency” of the “new era.”
7. The Fear of Missing Out (FOMO)
Peer pressure or FOMO (Fear Of Missing Out) also continues to be the leading factor that pushes people towards Bitcoin (and, in turn, other cryptocurrencies). The blockchain and the currencies associated with it offer large financial institutions a significant opportunity – something they can’t turn down.