What does Bitcoin’s latest hike tell us about its investors?
Bitcoin[1] has been in the news for all the right reasons lately. With 2020 drawing to a close, the coin has managed to do a repeat of the 2017 bull run and in the process, it has managed to create a new ATH by quite a margin. In the past week alone, Bitcoin[2] was able to go past key psychological price levels at $21k, $22k, and $23k. In fact, despite corrections, BTC was trading at $22,938, at press time.
However, is there a difference between Bitcoin’s present form and the bull run it was on a couple of years ago? While Bitcoin’s press time valuation has been greeted with much fanfare, it also warrants the question of whether this will be followed by a major price correction undoing all its gains.
One of the key reasons why Bitcoin’s price is likely to remain around the present price level in the coming months is primarily because this bull run was not solely on the back of mere ‘hype.’ In the past 3 years, Bitcoin’s price has been able to prove that it is a robust asset that can hold its value in the long run. For example, in comparison to gold’s[3] YTD of over 25 percent, Bitcoin has registered a YTD of over 220 percent.
If one were to compare both bull runs, it is easy to observe how Bitcoin today represents a robust investment opportunity for not just retail investors, but also institutions with the likes of MicroStrategy[5] and Grayscale[6] investing heavily, despite Bitcoin’s trading price. This creates an overall positive environment for Bitcoin, one that is likely to translate into its
