Could This Be Bitcoin's BIG Year?
A glimmer of optimism has emerged in the stock market. On Tuesday, U.S. stocks traded at record highs, most likely accelerated by a decrease in daily COVID-19 cases since the peak of the third wave at the beginning of January. On Sunday, there were about 55,000 recorded cases of COVID-19 compared to 93,000 just a week ago. This news comes as vaccination efforts have accelerated in the U.S., with more than two million doses in the arms of Americans. It’s been a while since there has been any kind of optimism surrounding the coronavirus and the efforts to eradicate it in the U.S.
The stock market isn’t the only thing that’s been surging to record highs; Bitcoin has been climbing to new highs for a few weeks now. On Tuesday, for the first time, Bitcoin broke above $50,000. It has made about 260% gains since the beginning of November. The Federal Reserve cut interest rates to near zero in March 2020 at the beginning of the coronavirus pandemic, which resulted in a weakened U.S. dollar. Interest rates are expected to stay the same for several more years as the U.S. rebounds from the economic turmoil the pandemic has caused.
Because of the weakened U.S. dollar, Bitcoin has managed to become an attractive currency — again. Over the past year, investors have been intrigued by Bitcoin’s comeback along with the impact that it and other cryptocurrencies could have in the future. One of the most valuable car companies on the stock market, Tesla (NASDAQ: TSLA), announced last week that it was holding some of its cash in bitcoin instead of traditional currency. The company revealed that it had bought $1.5 billion worth of bitcoin. Telsa also announced that it could soon accept the digital currency as payment for its cars. Purchases by influential companies bring more attention to Bitcoin and tell investors that maybe Bitcoin and the cryptocurrency market are here to stay.
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Sergey Nazarov, the co-founder of the blockchain platform Chainlink said of Bitcoin’s surge:
With Bitcoin breaking $50,000 a coin, I believe we’re reaching an inflection point where Bitcoin is essentially becoming the reserve currency of the internet. With the world’s richest man putting bitcoin on Tesla’s balance sheet, I think that institutions will have much more publicly acceptable justification to allocate to bitcoin. You have to understand, with this move, anyone who owns Tesla shares just received exposure to Bitcoin. The normalization of Bitcoin that is taking place right now cannot be understated.
It was only a few years ago when Bitcoin and other cryptocurrencies were soaring high and you couldn’t escape a day without hearing or reading about them reaching an all-time high. That hype sizzled along with those record prices as people were still a little unsure about cryptocurrencies and what the future had in store for them. At that time, it was a little too early to understand the kind of standing cryptocurrencies would have in the U.S. Now that there is a little more clarity of the potential of Bitcoin and the cryptocurrency market, more major companies have begun to make plans to incorporate cryptocurrencies into their businesses. In addition to Tesla, Mastercard (NYSE: MA) also announced its plans to support crypto. It said it will open up its network to some digital currencies later this year. PayPal (NASDAQ: PYPL) has voiced its support of cryptocurrencies by allowing customers to trade Bitcoin.
Sumit Gupta CEO and co-founder of the crypto exchange CoinDCX said:
Companies such as Google Pay and Samsung Pay too are now contemplating making inroads into cryptocurrency via Bitpay. We expect the trends to continue in the form of investments in these digital assets with the induction of newer products built around Bitcoin. The natural push to the price movement of Bitcoin is being fuelled by demands from retail and institutional investors.
Get ready because it looks like it’s going to be a big year for Bitcoin and the crypto market.
Until next time,
