Since its launch, Bitcoin has always been the most favorite Cryptocurrency. As the year passes, more and more investors want to put their money in Bitcoins. It has been noticed that institutional investors are buying up all the Bitcoins. Here we will find out the reasons for it.
In the year 2020, the Bitcoin market was really unstable. Though the volatility or instability of the Crypto market is one of its key features, the year showed us some interesting facts. The sudden fall and then rising price value are attracting institutional investors to buy Bitcoins. Here we will point out the possible reasons why institutional investors are buying up all the Bitcoins.
The total supply of Bitcoin is restricted, and the number is 21 million. Like traditional currency, any government or banking organization cannot print or increase the number of Bitcoins. That is why Crypto investors are prone to buying Bitcoins.
During the time of coronavirus pandemics, the surge in printing money by the central government made those investors uncomfortable. The US Federal Reserve balance sheet had jumped from $4 trillion to approximately $7 trillion in 2020. In this single year, the supply of Dollars has experienced 75% of growth.
Just a few months back, a well-reputed online payment system company allows its users to store Bitcoin in their wallets. There are some other companies also who are working to begging their new ventures with Bitcoins or Cryptocurrencies. For example, the Grayscale Bitcoin trust has gone from $2 billion AUM or asset under management to around $20 billion in just a year.
In the past year 2020, many investors who have a lot of doubt about the Crypto market and Bitcoins have invested a decent amount in the Crypto space. And these investors are4 not from a specific country or region, and they are from across the whole world.
The increasing price value of Bitcoins is attracting more organizational investors. As time passes, the acceptance of Bitcoins is also rising. More people are tending to invest their money in Bitcoins for several reasons. Many retailers have even started accepting payments in the form of Bitcoins.
Some organizations are also thinking about stepping forward with Bitcoins for new advanced projects. Many countries, though, are not adding Bitcoins with their core financial system but removing the ban that they have put earlier on Bitcoins. The technology behind the whole concept of Cryptocurrency or btc system,is Blockchain technology which also becoming popular day by day, and many organizations have already started using them.
In 2020, Gold rose around 27%. Gold is considered one of the most favorite assets all over the world. In ancient times, it was used as a currency, and now also it has its own value. But if we compare the rising of Gold value with the price value of Bitcoin, we will see that the rising rate of Bitcoin is much higher.
Though during the crucial time of 2020, Bitcoin has experienced a huge fall. But it has recovered within no time. And after recovering, it made new records of its price rise. Many people have shifted their investment from this yellow metal to the digital currency Bitcoin.
We all are aware of the inflating nature of fiat currency. As the government or central bank has the authority to print money in order to boost the economy, there is a high chance of inflation. This is why institutional investors are preferring Bitcoin.
Yes, the volatile nature of Bitcoin has its perks and negatives both. But inflation of fiat currency is much more effective. The total number of Bitcoins is fixed. So, there is no chance of Inflation. But investors can create a scarcity of Bitcoins when they want, which will eventually increase the value price.
Institutional investors are prone to buying up all the Bitcoins for a specific reason. Experts say they want to create scarcity by buying up all the Bitcoins, which will increase the value price. This way, they can earn more returns.