Bitcoin's comeback : Why Bitcoin isn't a bubble?
It's the same question any time the price of Bitcoin (BTC) rises! Is this a speculative bubble that has caused the Bitcoin price to skyrocket? The bull runs of 2012 and 2017 are still fresh in the minds of cryptocurrency investors. Bitcoin's price has plummeted after a sharp rise. So, how about the bull market that began in 2020? Discover three compelling reasons why the Bitcoin craze should be taken seriously! Aside from speculation, this rise corresponds to a significant fundamental change.
If Bitcoin is considered the true beginning of cryptocurrency, the crypto ecosystem already has over ten years of experience. This ecosystem has learned how to grow and organise itself in just ten years. As a result, the general public has begun to trust the area of cryptocurrency.
Furthermore, blockchain technology has reached maturity. As a result, many industries are implementing blockchain technology to meet their needs, which benefits Bitcoin indirectly. Even if not everyone understands blockchain, the majority of people now recognise that Bitcoin is built on a viable and revolutionary technology.
It is also much easier to buy Bitcoin these days, thanks to the more evolved crypto ecosystem. As a result, a slew of new exchanges have arisen. Their user experience has improved over time, and their costs have decreased. The level of protection has also significantly improved.
This is most likely a significant change from the 2017 episode. Many more people are now familiar with Bitcoin and its basic concepts. Bitcoin is no longer a mysterious black box or a geeky gadget. As a result, the existence of several small carriers in crypto is unsurprising.
The COVID-19 crisis has undeniably fuelled, if not catalysed, the crypto wave that has been observed since 2020. On the one hand, the health crisis caused the financial markets to collapse in mid-March 2020, which will be remembered as a landmark event. Though cryptos were not immune to the shock, they recovered much faster than other assets (including Bitcoin).
In reality, the day after the crash, Bitcoin's price started what would turn out to be its most bullish period ever. The durability of cryptos in times of crisis, which has long been touted, was demonstrated in 2020. Cryptocurrencies' decentralisation is a key advantage that has enabled them to weather the financial crisis better than any other asset.
In general, the health crisis has resulted in a shift in consumer behaviour. Lockdowns and social distancing steps have been implemented to combat the virus's spread. People are now using less cash and prefer electronic payments as a result of these historic steps. Also at the state level, several governments are considering implementing a national electronic currency.
Furthermore, though confined, a number of people had more time to consider their investment. Many people have chosen to try crypto because of their increasing mistrust of conventional finance.
Finally, many countries have resorted to stimulus packages consisting of money printing to boost their economies. Without casting doubt on these plans' good intentions, they will flood the market with liquidity. Opening the floodgates of monetary creation, on the other hand, reintroduces the dreaded spectre of inflation. Bitcoin stands out as the latest safe haven against inflation because it is not subject to the activities of central banks.
The most notable difference from the state of Bitcoin in 2017 is the involvement of institutional investors and other economic heavyweights. Their policy and movements reveal a lot about how they feel about Bitcoin.
However, it is undeniable that the news of recent months has been dominated by well-known corporations deciding to invest in Bitcoin. Every month, new companies enter the crypto space: PayPal, MicroStrategy, Tesla, and so on. Goldman Sachs and other well-known banks and fund managers are moving closer to investing in Bitcoin. Around the same time, the number of billionaires who have changed their minds about Bitcoin and now have it in their portfolio is uncountable.
During the 2017 Bitcoin bubble, this phenomenon did not occur. The incorporation of Bitcoin into the strategies of the major players establishes Bitcoin's legitimacy once and for all. Let it be said that a paradigm shift is taking place. The incorporation of Bitcoin into the strategies of the major players establishes Bitcoin's legitimacy once and for all. Let it be said that a paradigm shift is taking place.