On Monday, January 11, 2021, after reaching its ATH or historical high of US$42,000, the price of Bitcoin dropped 20%, the crypto-sphere is worried and wonders whether to sell it all or it's time to buy.
Launched for the first time in 2009, Bitcoin is the first cryptocurrency or digital currency created by Satoshi Nakamoto. Since then, Bitcoin has become a common currency and its price continues to amaze everyone.
In 2020, the price of Bitcoin jumped more than 400%, after reaching a low of $3,600 in March.
Last week, Bitcoin was in a rising market trend, also known as the 'bull market' or bullish, reaching a record high of US$42,000.
Analysts said that, unlike previous price increases, one of the main factors behind the price rise seemed to be the increase in purchases of cryptocurrency by institutional investors.
In August 2020, Microstrategy began buying large quantities of Bitcoins via the Coinbase platform. The objective of this Nasdaq-listed company is to make cryptos its main reserve asset.
As of December 2020, Microstrategy had purchased an additional 29,646 Bitcoins for $650 million, bringing the number of Bitcoins held by the company to 70,470, with a value of more than $1.6 billion. The company believes that bitcoin will provide better returns and preserve the value of its capital over time than holding cash.
Other companies such as MassMutual, Square have also acquired interesting numbers of Bitcoin and the digital asset investment manager Grayscale has become the largest crypto asset manager in the world. On January 11, 2021, Grayscale had $24.5 billion in assets under management in its various cryptos funds.
In early January, Cointelegraph reported that Grayscale's purchases of Bitcoin exceeded new Bitcoin mining by a factor of three, capping a year of aggressive hoarding by the fund manager.
On November 12, 2020, PayPal had announced in a press release on Thursday that all PayPal users can officially hold, buy and sell encryptions on the application.
Thanks to this new service offered by the global payment provider PayPal, its users will be able to make payments at any of PayPal's 26 million merchants.
This decision was one of the important reasons that allowed cryptocurrency to spread further. PayPal has 346 million active accounts and processed more than $222 billion in payments in the second quarter of 2020, according to PYMNTS.
In January 2021, approximately two months after the adoption of cryptography into Paypal's services, the company doubled its previous record for crypto-currency volume, with $242 million in digital assets changing hands on the platform during January 11, 2021.
According to data from Nomics, the data aggregator for the crypto market, since January 1, daily volume has increased by 950% to $22.8 million.
Nigel Green, the CEO of deVere Group, a cryptocurrency exchange platform, said: 'They are attracted by the good returns that the digital asset class currently offers but, more importantly, by the enormous future potential it offers.
'As some of the world's largest institutions - including multinational payment companies and Wall Street giants - increasingly come together in the crypto sphere, bringing with them their huge capital and expertise, this in turn is boosting consumer interest'.
The price of Bitcoin (BTC) rose 20 percent on January 12, from $30,500 to about $36,600 on major stock exchanges.
Bitcoin is now trading at $34,000, after reaching its ATH of $42,000.
In 2017, the price of Bitcoin was also making headlines for a sharp increase in its value, which reached the
The year 2013 was the first spike in the price of bitcoin, which had reached about $1,000. Its price climbed to about $19,000 in December 2017; the following year, it fell by more than 80 percent.
The idea of digital currency was established within a trusted protocol, which was based on a set of rules guaranteeing the integrity of the data exchanged in calculations distributed over billions of computers worldwide without the need for authentication provided by a trusted third party, such as a bank.
However, it is difficult to make a prediction, especially about the future of Bitcoin and cryptos in general; but, it is undeniable that the general interest in Bitcoin seems to have increased compared to 2017.
It is interesting to note that search engines can influence the psychology of investors and participants in the cryptocurrency market.
Indeed, according to Google Trends data, the barometer for assessing general or detailed interest in trend topics; Bitcoin's search index only counts for 20 points in November 2020, compared to 100 points in December 2017.
In December 2020, Google Trends obtained a value of 21 for the search query on Bitcoin worldwide; 'bitcoin (BTC, -4.71%) price'. This is the highest level since June 2019.
In January 2021, when Bitcoin reached a record high due to growing investor interest and claims that cryptocurrency is becoming a common method of payment, its value quadrupled compared to 2020, Bitcoin began the year 2021 by breaking the $40,000 mark for the first time, less than three weeks after breaking the $20,000 mark.
As a reminder, in 2017, Bitcoin experienced a great boom, not too different from what we are seeing today, and was the subject of similar discussions, with a mixture of enthusiasm and concern.
In 2017, the price of Bitcoin had risen from about $1,000 to $20,000, with a return of about 20 times over a short period of time. After this huge increase, Bitcoin had experienced a sharp and painful decline from its peak in 2017.
In 2020, Bitcoin reached about $5,000 during the pandemic lows in March 2020 and reached a price of $40,000 on January 10, 2021, a yield 8 times higher than in 2017.
Enthusiasm for Bitcoin is much more striking today than it was in 2017, especially because of the large institutional investors entering the crypto sphere.
However, this does not erase the idea of a potential much stronger correction for 2021 after Bitcoin has reached its record level. The value of Bitcoin is now at 34000USD, will it go down or up? Case to follow
Written by Laetitia Harson, Project Manager
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