Why is Bitcoin Price going up?
Why is Bitcoin Price going up?
The price of Bitcoin was around 3000 Dollars in December 2018, several months later, it reached almost 14000 Dollars in june 2019!
As you can see on CoinMarketCap:
How to explain a rise in the price of Bitcoin so fast in a few months after almost two years of Bitcoin bear market?
If you look for a reason of the sudden rise of Bitcoin price, you will surely have many different explanations, theories or rumors because it is not clear what are the factors or players that play and influence the price of Bitcoin.
Indeed, it must be remembered that the Bitcoin or cryptocurrency trading market is not regulated at all unlike the traditional stock market that is monitored by the financial authorities of each country.
This means that anyone can influence the price of Bitcoin in the cryptocurrency market, pushing it up or down.
This market is still small compared to the American stock market such as the Nasdaq, SP500 or the CAC 40 in France.
So what can be the reasons for the rise in the price of Bitcoin in the recent months.
Remember that a quick and sudden rise is never good for any publicly traded asset and that a good consolidation with a gradual rise in price is necessary to return to justified prices even if the price of Bitcoin is based only on speculation.
In May 2020 will happen the Bitcoin Halving or halvening according to the term used in English.
You can read our article on this topic to understand what Bitcoin halving is in 2020.
Every four years or so, Bitcoin is subject to an important event called Bitcoin Halving or “half the division of the bitcoin mining premium”.
When creating Bitcoin, an event programmed in advance in the code was implemented by its creator, Satoshi Nakamoto. This event, called halving is automatically triggered when a number of blocks have been mined.
The reward of mining is then divided by two.
Halving is one of Bitcoin’s iconic processes. Indeed, its impact is major on the currency itself, but also on everything around it.
In general, a Bitcoin halving means a rise in the price of Bitcoin and this is therefore expected in May 2020.
This may be a reason for the rise in the price of Bitcoin. Professional traders may anticipate this event to resell their Bitcoin before the next Bitcoin halving date.
Less and less Bitcoins on the market?
Over time, there are more and more people who are interested in Bitcoin and buy some.
The consequence is that there is less and less bitcoins on the market, we must also count those who lose their bitcoins.
It is said that of the 21 million Bitcoins, there would already be just 17 millions left.
Satoshi Nakamoto’s Bitcoin wallet has 1 million wallet that have never moved in years because we do not know who the creator of Bitcoin is, whether he is alive or not.
Institutions moving in the Bitcoin and Cryptocurrency market means that these investment funds also buy Bitcoin.
Bakkt will offer Bitcoin Futures with real Bitcoins, so they have to buy some to have some in stock before starting their operations maybe in October 2019.
All these new financial players investing in Bitcoin must buy Bitcoins, and we are talking about millions or hundreds of millions of dollars in Bitcoin purchases!
This is currently the most popular reason to explain the rise in the price of Bitcoin as commented Max Keizer in several interviews on television.
Big players need to buy and store bitcoin in anticipation of market developments, rising demand for Bitcoins.
There has been an increase in the number of institutions actively investing (or planning to invest) in cryptocurrency.
Fidelity opened a cryptocurrency storage service in early 2019; they surveyed institutional investors and found out that 43% of them wanted to add cryptocurrencies to their portfolios.
If institutional investors decided to transfer their assets under bond management, or gold, to Bitcoin, the growth would be amazing.
Much of the recent growth at Bitcoin is attributable to the introduction of institutional investors with a lot of capital.
The market capitalization of the entire crypto market is about $300 billion, the last time it reached $300 billion, Bitcoin reached unprecedented heights, as well as Ethereum, Litecoin and several other big tokens.
This is important because the lack of liquidity has been cited as one of the main reasons why institutional investors have moved cryptocurrency away in the past. They feared that there were not enough buyers to sell large orders at the time of the sale.
It seems that the market is starting to provide this liquidity in an organic way (let’s not talk about the market makers). Just in time for the launch in 2019 of platforms such as BAKKT, offering an acceleration ramp for a new wave of investments.
Facebook and its cryptocurrency Libra.
If Facebook plans to launch its cryptocurrency Libra, it indicates the interest of the financial and media world for Bitcoin and cryptocurrency!
Read our full article on Libra:
In announcing this news, Facebook has brought a large number of individuals and professionals to take a look at Bitcoin and cryptocurrency.
Facebook has the media attention, it is one of the largest companies in the world and has more money than several countries.
Over the past week, Project Libra news has been broadcast in Twitter, medium, steemit and even traditional media.
Forbes, Fast Money, CNN, Financial Times; everyone covers Facebook’s arrival into the crypto markets.
It’s great for Bitcoin. The wave of private investors has not even begun.
Retailers are not back into buying bitcoin yet, institutionals are leading the way this time.
The search volume on Google for “Bitcoin” is still relatively small compared to the last time the price had experienced such growth.
Which means that individuals have not yet returned to Bitcoin after the fall of its price during the last two years!
Recently, however, we noticed that searches for the word Bitcoin on Google exceed those for stock market shares!
After 2 years, the search term Bitcoin has finally overtaken Stocks on Google, although it is slightly higher, but it’s a win for Bitcoin.
At the same time, the most asked question of the year also related to Bitcoin: “What is Bitcoin?”
As the retail market grows, we will see this volume of research increase and the FOMO will come back for the next Bitcoin bull run.
Donald Trump himself spoke about Bitcoin!
If this is not a sign!?
The President of the United States himself publicly speaks about Bitcoin by expressing fears about it, recalling that the Dollar is the only strong currency!
If the American President himself comes to talk about Bitcoin, it is because it is starting to take a more and more important place and that it begins to annoy governments in particular!
Donald Trump also spoke about Facebook’s Libra project, again, it indicates a fear in trying to dissuade the public from taking an interest in it.
But talking about Bitcoin on TV or Twitter, Donald Trump has attracted the attention of millions of people on Bitcoin and cryptocurrency. Fantastic!
The Tether rumor.
This is one of the rumors or hypothesis that also lurks to explain the rise in the price of Bitcoin.
The Tether USDT mass printing, without having any real dollar behind every printed Tether.
There is roughly $4 billion in Tether on the crypto market, 80% of bitcoin trading would be done with Tether because most crypto exchanges have no Dollar but Tether which acts as a stable Dollar.
The assumption is to print Tether USDT without a real dollar to back it, to buy Bitcoin with these Tether coins and then sell these Bitcoins for real dollars from new Bitcoin buyers.
The risk being that one day, people realize that there were actually not enough dollars to cover the printed tethers, the last ones arrived ending up with nothing therefore.
There are therefore several explanations, hypotheses or rumors that come to explain the rise of the Bitcoin price in recent months.
If the price of Bitcoin has risen rapidly in the first months of 2019, there is one or more reasons behind it.
This can be a mix also of the explanations given in this article.
To find out, we will have to wait to see what will happen with the price of Bitcoin soon.
Either it will find a support in the $10,800 region and will continue its rise towards the $20,000.
Or there will be no support and a fall to the $6,000 is quite possible if the sudden rise in the price of Bitcoin was not healthy as it should have been.
The crypto market can go up or down quickly over a short period of time, it’s a very volatile and dangerous market for inexperienced investors and traders.
In the best case, we are in a bullish phase that has actually started with a Bitcoin bull run that is looming in the coming months.
It must be said that the fact that institutions investing in Bitcoin indicates that huge sums of money are entering the crypto market.
The fact that individuals have not yet returned to the cryptos market suggests a rise in prices in the coming months and years!
Bitcoin price is going up, let’s hope it keeps going up.