Bitcoin’s ascension into mainstream finance has achieved a key milestone. Bitcoin’s price has been steadily increasing and is now on the verge of breaking a new high.
Although, for the past few months, this cryptocurrency has experienced ups and downs. Bitcoin has hit over $68,000 as a new all-time high.
That’s why the fascination with Bitcoin among investors knows no bounds. Sometimes they are worried about the declining value of Bitcoin, and sometimes they are curious about why is bitcoin going up. So, today’s article is only for individuals who are curious about why is bitcoin going up.
In this piece, I will explain the possible reason why is bitcoin going up and discuss some of the elements that influence this cryptocurrency’s, bitcoin’s, value.
So, are you all set? Let’s get this game started.
Why Is Bitcoin Going Up?
Bitcoin’s price has surged in recent days. According to coindesk.com the world’s largest cryptocurrency, bitcoin, was valued at $64,865.30 on November 11th, 2021. For Bitcoin and cryptocurrency in general, it’s been a turbulent year. Bitcoin had a worth of less than $35,000 at the start of the year. This cryptocurrency has been experiencing many ups and downs all year round. However, the value is presently soaring daily. And, now, it is on the way to exceeding its all-time-high. So, why is bitcoin going up? This is the question that every Bitcoin Up potential investor is asking.
So, let’s take a look at some of the recent factors that have pushed bitcoin’s price higher than ever before. These factors will make you understand why is bitcoin going up.
Breaking Down The Factors Contributing To Why Is Bitcoin Going Up
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Announcement Of The First Cryptocurrency Investment Fund By Finma
At the end of September, the Swiss Financial Market Supervisory Authority (Finma), the country’s financial regulator, approved the first cryptocurrency investment fund, named the Crypto Market Index Fund, according to Swiss law, for distribution to qualified investors, including pension funds. Which is the underlying basis of why is bitcoin going up.
Other prominent coins, including Ethereum, Ripple, and Dogecoin, followed suit. The investment fund, according to Finma, will enable significant innovation in a consistent technology-neutral manner.
Switzerland has one of the world’s major banking sectors and accounts for around 25% of global cross-border asset management, according to Simon Peters, an analyst at trading platform eToro. The opportunity for investors to acquire more exposure to crypto-assets might be exciting for the space.
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The Purchase Of 1.6 Billion Bitcoin By An Unknown Someone
After the above circumstances, a $1.6 billion Bitcoin purchase was made by someone unknown. This purchase immediately increased the coin’s value by 5% and is a vital reason for why is bitcoin going up. It’s unclear who made the purchase, although it’s thought to have taken place in Asia.
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El Salvador Declares Bitcoin To Be A Legal Medium Of Exchange
El Salvador became the first country in the world to recognize Bitcoin as legal cash earlier this year, which has had an impact on its price. This is another factor that contributes to why is bitcoin going up.
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Establishment Of Exchange-Traded Fund (ETF ) In The United States
In the United States, an exchange-traded fund (ETF) was launched on October 19. The cryptocurrency was trading at US$66,975 following the establishment of the exchange-traded fund (ETF). This significantly improved bitcoin’s visibility among investors.
This fund allows investors to bet on bitcoin’s future worth without actually owning the currency.
It’s the first time investors have been able to trade a bitcoin-related product on the New York Stock Exchange (NYSE). It has been preceded by a lot of media attention and financial market speculation.
It began trading at the US $40 per share and ended the day up 5% with assets of US$570 million. This makes it the second-most-traded new ETF in history (the first was launched by BlackRock, the world’s largest asset management firm). As a result, the price of bitcoin has soared dramatically.
ETFs are similar to stocks because they can be traded like stocks, are regulated, and may be traded by anyone with a brokerage account. The ProShares Bitcoin Strategy ETF (or BITO for short) is the first to provide exposure to bitcoin’s highs and lows to non-technical investors. They also don’t have to go through the time-consuming process of directly purchasing the coins.
Few More Elements That Influenced The Rationale For Why Is Bitcoin Going Up. They are-
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Adoption By Institutions
In the face of market volatility and inflation, cryptocurrencies, notably Bitcoin, are now seen as a safe-haven asset. Because of the current societal and economic atmosphere, people are holding less cash and staying hedged against market volatility. The conversion of cash treasuries to cryptocurrencies has become increasingly popular among public companies. Square, a payments corporation based in the United States, purchased $50 million worth of bitcoins on October 8, 2020.
Since then, several businesses have followed suit. The value of cryptocurrencies has surged as a currency and a store of value as a result of the trust that corporate titans have placed in them.
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Cryptocurrencies And Paypal
Paypal, a multinational digital payments business, said in October 2020 that it would integrate cryptocurrency buying and selling capabilities to its platform. The four major currencies that were introduced were Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.
This was also a major reason behind why is bitcoin going up.
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Scarcity Caused By Bitcoin Halving
It is common knowledge that most cryptocurrencies have a finite supply. One of these is Bitcoin. This year has seen the third Bitcoin halving. Every four years, the Bitcoin network experiences a big event called the half of Bitcoin.
The Bitcoin network functions because it uses a technique called Bitcoin mining to introduce new bitcoins into the market. Bitcoin miners validate Bitcoin blocks, which are collections of Bitcoin transactions. A miner who can verify one block of transactions and add it to the Bitcoin network is rewarded with a set quantity of bitcoins every 10 minutes.
Every four years, or when 210,000 blocks have been mined, the reward per block is cut in half. A bitcoin halving is a phenomenon in which the block reward for Bitcoin is cut by 50% every four years.
It also increases the stock-to-flow ratio (total cash available divided by total currency in circulation), making it extremely rare. So, one of the most important variables influencing Bitcoin’s price is its halving.
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Public Accessibility Is Easier Than Ever Before
Cryptocurrency is a type of digital money that may be used as a store of value as well as a medium of exchange. Even though it is only now gaining traction as a valid payment mechanism, it has already established itself as a new asset class during the last decade.
“Investing in crypto assets, or investments and lending related to them, often involves assuming very high risks with investors’ money,” the Financial Conduct Authority (FCA) noted in January.
To make crypto investing more accessible, several platforms have been established and have received funding. CoinSwitch Kuber is one such site, with over two million members in just over six months of its existence.
All of these factors have contributed to the bitcoin price hike and are still contributing to the role of why is bitcoin going up.
What Could Be The Next Step?
Bitcoin’s price is typically volatile, which makes bitcoin price prediction tough. Predicting what will happen next is extremely challenging. Bitcoin could either continue to rise to a new all-time high or drop spectacularly overnight. As a result, it is a high-risk investment, and you should only invest what you can afford to lose.
So, before taking any step, you should conduct your research on the bitcoin price prediction.
What To Remember As An Investor
If you’re considering investing in cryptocurrencies, be prepared for any kind of volatility. As a result, experts advise limiting your crypto investments to less than 5% of your whole portfolio.
Don’t let a sudden price increase or decrease influence your long-term investment strategy, just as you shouldn’t let a price drop influence your decision to buy crypto.
Even more critically, don’t go out and buy additional cryptocurrency just because the price is going up. Make sure you have all of your financial bases covered, from retirement accounts to emergency reserves, before investing any more money in a speculative asset like Bitcoin.
The greatest thing you can do is ignore cryptocurrency, regardless of whether it is increasing or decreasing in value. You may set it and forget it, just like any other long-term investment account.
What Makes Cryptocurrencies Such As Bitcoin Go Ups And Downs?
It’s not unprecedented for Bitcoin to rise or decrease in price by 5% or even 10% in a single day.
Let’s take a look at what makes bitcoin or other cryptocurrencies so important and why their price can fluctuate dramatically in a single day.
Factors Affecting The Price Of Bitcoin Include:
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Supply And Demand
Supply and demand determine the value of anything. When demand exceeds supply, prices rise. For example, if there is a drought, grain and produce prices will rise if demand does not shift. Bitcoin operates on the same supply and demand dynamics as traditional currencies.
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Production Costs
A procedure known as mining is used to create Bitcoin tokens. In Bitcoin mining, a computer is used to verify the next block on the blockchain. To mine successfully, more sophisticated equipment is required. This increases mining costs.
As mining expenses rise, the value of the cryptocurrency rises with it. Miners will not mine if the value of the metal they are mining is insufficient to cover their costs. And, because miners are required to make the blockchain work, the price will have to rise as long as there is a demand for it.
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Cryptocurrency Exchanges
Two popular cryptocurrencies, Bitcoin and Ether, are exchanged on a variety of platforms. The most popular tokens are listed on almost every cryptocurrency market. More exchanges listing bitcoin can increase the number of investors ready and able to acquire it, hence increasing demand. And, everything else being equal, when demand grows, so does the price. So, this reflects the reason why is bitcoin going up.
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Competition
A useful blockchain application can quickly grow a network, especially if it addresses a flaw in a rival service. If a new competitor develops traction, it depletes the value of the incumbent, causing the incumbent’s price to fall as the new competitor’s token price rises.
How Much Is 100 Dollars In Bitcoins?
People often ask how much is 100 dollars in bitcoins. As mentioned earlier, several factors influence the price of a single bitcoin, including demand and supply, competition, and regulation.
Investor perceptions of cryptocurrency are also influenced by news events. The intrinsic worth of a bitcoin can also be calculated by calculating the average marginal cost of production of a bitcoin at any given time, depending on the block reward, power price, mining hardware energy efficiency, and mining difficulty.
So, how much is 100 dollars in bitcoins? At the time of writing, on Nov 12, 2021, according to the Exchange Rate $1 = 0.000016 bitcoin. So, $100 = 0.0016 bitcoin. As bitcoin’s value fluctuates, so the value of bitcoin in dollars will also change.
Bottom Line
Finally, I can say that right now bitcoin is in a rising trend. If you understand the reason behind why is bitcoin going up or if you recognize what is playing a role in the value of bitcoin, then you can make better bitcoin investment decisions.
If you’re thinking it’s too late to invest in bitcoin cryptocurrency because of growing prices, remember that this is only the beginning. Bitcoin cryptocurrency will become mainstream as more countries strive to regulate the market.
Frequently Asked Questions
1. What Is Bitcoin’s Revenue Model?
Bitcoin does not represent ownership of a corporation or entity, unlike stocks. Bitcoin is a form of digital cash, similar to how $1 is a form of paper currency. Bitcoin holders profit as the value of the coin rises. You would have $6,168,386 if you bought 100 coins at $65.52 on a given day of 2013, and held them until the value became $68,521 on a given day of 2021.
2. Is Bitcoin A Sound Financial Investment?
Bitcoin, despite its drawbacks, can be a profitable investment. However, you should think about if it’s appropriate for your portfolio. Bitcoin is no exception to the rule that all cryptocurrencies are volatile and subject to market risk.
3. Is It Possible To Steal Bitcoins?
Bitcoin is decentralized digital money that secures transactions via encryption. By getting access to bitcoin owners’ digital wallets, hackers can steal bitcoins.
4. Why Is Bitcoin Not The Way Of The Future?
Bitcoin’s volatility is one of the reasons why it is unlikely to be the future of finance. Volatility has little place in a solid, reliable economic organization. With China, the United States, and the European Union all preparing to launch digital currencies in the near future, the idea of Bitcoin and CBDCs coexisting peacefully is a fantasy.
