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5 Reasons Why Bitcoin Has Pushed To New Highs

Bitcoin rose to a record all-time high price of $19,864 on Monday, expanding its year-to-date increase to an impressive 170% amid a tumultuous swing in global markets in 2020.

There are five reasons why the oldest and most important cryptocurrency has reached new highs.

Institutional interest

According to a November 20 report by JPMorgan Chase analysts, some institutional investors are exposed to bitcoin such as buying into the publicly traded Grayscale Bitcoin Trust (GBTC). Guggenheim, a money manager who oversees investors for $233 billion, said its Macro Opportunities Fund could devote up to 10 percent of net assets to GBTC in regulatory filings, CoinDesk reported on November 28. The outstanding amount of bitcoin futures contracts is also rising on the Chicago Mercantile Exchange, seen as another indication that according to the JPMorgan report, major investors are using commodity markets to speculate on the price of the cryptocurrency.

Hedge fund managers have a long view

Well-known hedge fund managers increasingly call bitcoin a long-term investment. Legendary managers, including Paul Tudor Jones II and Stanley Druckenmiller, have recently stated that the cryptocurrency price, denominated in US dollars, could rise as the Federal Reserve prints money to help finance the government’s emergency stimulus bills. The central bank so far has produced over $3 trillion in new money in 2020, or over three-quarters of its previous 107-year history.

Analysts are positive

In recent days, Wall Street analysts have commented positively. AllianceBernstein, a $631-billion money manager, published a report which said that Bitcoin may have a role in the asset allocation after a pandemic, CoinDesk reported on Monday. Inigo Fraser Jenkins, co-head of Bernstein Research’s portfolio strategy unit, wrote that when it comes to a role in hedging against inflation, “the driver of bitcoin is similar to that of gold.”

The PayPal effects

Customers will acquire bitcoin through PayPal (PYPL) – nearly 346 million active accounts. The person-to-person payment network revealed on October 21 that it will allow customers to purchase, sell and keep bitcoin. The firm claims cryptocurrency will become a “funding source for purchases at its 26 million merchants worldwide.”

Ok on OKExThe bitcoin industry overcame a big source of concern last week – bitcoin outflows from one of the world’s largest cryptocurrency exchanges, OKEx. Few traders and observers suggested that the conclusion of a five-week suspension of withdrawals could result in liquidations that could place sales pressure on the bitcoin sector. Data collected from the cryptocurrency’s underlying blockchain network shows some 24,631 bitcoin, worth $500 million at current rates, flowed out of the market within 24 hours of the suspension last week.

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