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Why Is Bitcoin Price Going Up? Are Big Company Investments Driving BTC Price To All-Time Highs?

BTC Price Goes Up Hitting New ATH

In 2020, the financial world watched as BTC climbed up its highest level yet topping its December 2017 all-time high. To be specific, in less than a month after breaking the $20,000 mark BTC rose to an all-time high of above $45K. Investors and traders wondered will BTC price rise again and surpass $45K.

Actually, it did and further increased to an ATH of above $55,000 on Feb 20, 2021. Then we wonder what makes the BTC price go up more than this. What has contributed to the BTC price going up?

will Bitcoin go up in price
Source: Coingecko

In the same manner, the Bitcoin market cap hit $1 trillion resulting from the bullish Bitcoin price rally. In retrospect, the Bitcoin market cap grew 3x from over $360 million in December 2020.

Specifically, the rally in BTC price going up is a result of the continuous investments by multi-billionaire companies and individuals. Since 2020, investments in Bitcoin have been on the rise. Suddenly, corporate investors are showing an increased interest in BTC. Such an act has become the driving force for BTC adoption.

Every now and again institutions are openly announcing their investment in BTC. Additionally, pushing more people to invest in crypto-assets and BTC in particular. Therefore, growing institutional interest is among many of the key factors that contribute to BTC price going up.

For decades gold has been a safe haven for investments. However, as inflows in BTC continue to increase, investors are finally understanding that Bitcoin is a superior future store of value. Notably, the 2017 bull market was characterized by a financial bubble and investors who were buying in fear of missing out (FOMO).

Unlike 2017 the reason for BTC’s massive rise is a big influx of investors from large-scale institutions.

Large Institutions and Individuals That Have Invested in BTC

Tesla

To begin with, the escalating pace of Tesla investing in Bitcoin as a portfolio asset has grabbed the interest of other stakeholders. Tesla a luxury car brand, recently purchased $1.5 billion worth of Bitcoin. Aside from this, the company may also start accepting BTC as payment for its products.

Tesla buys bitcoin

Moreover, Tesla says it might purchase more BTC in the future. After the announcement, stakeholders held the thought — will Bitcoin go up in price? In fact, Tesla’s big Bitcoin purchase led to more corporate and institutional investor adoption, driving the digital currency’s price higher.

MicroStrategy

Another company to add Bitcoin to its corporate treasury, is the largest independent publicly-traded business intelligence company, MicroStrategy. The company’s acquisition of additional Bitcoins reaffirms its belief in Bitcoin value. BTC the world’s most widely-adopted cryptocurrency and a dependable store of value. 

MicroStrategy buys bitcoin

In particular, MicroStrategy announced its offering of $600 million in convertible notes. The firm will use the proceeds to buy more Bitcoin. The maturity date for the notes is set for February 15, 2027. This caused experts to ask if BTC price going up again after this? It seems this move by the firm pushed Bitcoin to set its latest ATH record at $50,000.

Microstrategy completed its debt offering, with the company stating that the net proceeds from the sale of the notes will be approximately $1.03 billion. The proceeds will be used to buy Bitcoin at the rate of about $2,000 per second.

Paypal

In October 2020, online payments giant PayPal announced it would let customers buy, hold and sell a range of cryptocurrencies — including Bitcoin. It also allowed them to make purchases with Bitcoin at more than 26 million businesses. More so, PayPal disclosed its plans to expand crypto services globally and support central bank digital currencies (CBDCs) in 2021.

In fact, what keeps BTC price going up is the involvement of such large players in the crypto world. It gives BTC the legitimacy it needs. Apparently, Bitcoin is surging to records. Moreover, investors are looking to profit from the digital currency’s momentum.

Billionaire Stanley Druckenmiller

Following similar moves, billionaire Stanley Druckenmiller also bought and owns BTC. As a matter of fact, he sees the cryptocurrency as an attractive store of value that could beat gold. Druckenmiller’s Bitcoin purchase attracted much attention in the crypto space.

It became a catalyst in BTC adoption and BTC price going up. This made professionals and newbies in the crypto industry invest and take cryptocurrencies seriously.

Hedge Fund Manager Paul Tudor Jones

Besides Druckenmiller, other famed hedge fund managers who have invested in Bitcoin include Paul Tudor Jones. Jones, one of Wall Street’s most successful hedge fund managers, put about 2% of his assets in BTC. There’s no doubt large hedge funds and publicly traded companies make BTC bullish.

The reason for people’s newfound faith in BTC price going up has to do with who is doing the investing. Individual investors who believe in the future and value of the technology are causing BTC to go up. This gives BTC a reputable investment and mainstream support.

Even more, former Goldman Sachs hedge fund manager Raoul Pal has more than 50% of his assets in BTC. He has also predicted that the price of Bitcoin will reach $1 million within five years. Also, veteran investor Bill Miller, who recently said that all major banks will eventually have exposure to Bitcoin.

What keeps BTC price going up is that the crypto is backed by credible companies. Mainstream financial media is paying attention and reporting on the crypto on a daily basis. And this time it’s not dismissive. Investors mean serious business.

Fidelity

In August 2020, Fidelity launched the Wise Origin Bitcoin Index Fund I. This is a passively managed Bitcoin fund for accredited investors. Remarkable, Fidelity is one of the few mainline Wall Street firms to fully embrace Bitcoin.

Such developments confirm a growing trend of regulatory and institutional acceptance of cryptocurrencies. Recently, Fidelity also released survey data showing that 36% of institutional investors in the U.S. and Europe already owned digital currencies. Moreover, 60% believed digital assets belonged in their portfolios.

BTC is Rallying Towards Being the New Digital Gold

Others are wondering “Is BTC price going up beyond the latest ATH?” Bitcoin is on track to becoming the gold of the future, investment experts say. Aside from the older generation, millennials and younger investors, who are also termed ‘digital natives’ believe it competes better against gold as a safe haven asset.

Gold gets its value from individuals and institutions believing that it has value. Hence, they invest in gold. The same principle applies to Bitcoin. As individuals and institutions believe in BTC value the higher the price goes.

JP Morgan made a bold long-term price target for Bitcoin, claiming the red-hot cryptocurrency could rally as high as $146,000. Furthermore, it stated that BTC competes with gold as an “alternative” currency. This shows that Bitcoin is a long-term investment and could be even more valuable in the future.

Bitcoin’s competition with gold has already started in people’s minds. “Considering how big the financial investment into gold is, a crowding out of gold as an ‘alternative’ currency implies a big upside for Bitcoin over the long term”, expressed JPMorgan strategists

Of late BTC has broken through several price predictions and psychological barriers. Once again, reaching a new record high in 2021. What is interesting is that Bitcoin, and other cryptocurrencies, were not nearly as topical as they were back then. 

will BTC price rise again
Source: Coingecko

Questions continue to pour out: is BTC becoming the new gold in 2021 and will BTC go up in price over the years? Prior, investors would invest in gold to hedge themselves against a devaluation of fiat currencies and other asset classes.

Nowadays, institutions’ have diverse reasons as to why they are investing in BTC. However, investors are often motivated by the need to manage risk and to hedge them against the devaluation of certain asset classes which include local and foreign fiat currencies. This has made the BTC price rise again. This is what makes the BTC price go up.

Driving factors for crypto price increase in 2021

It is with no doubt BTC has been benefiting from a steady wave of institutional investments. However, there are other contributing factors to the BTC price increase. Firstly, is the ability to buy fractions of one whole unit of Bitcoin.

Actually, this opened the cryptocurrency up to a broader public. More so payments services company PayPal made it possible for account holders to complete online transactions with the cryptocurrency.

During the course of 2020, the world was hit by the Covid-19 pandemic. In response to the massive economic strain from the pandemic, countries like the US alone printed trillions of dollars. Also, it outspent what it has brought in with tax dollars, creating an unprecedented level of debt.

This level of spending and money creation became a pushing catalyst for many investors to invest in Bitcoin. The crypto serves as a safe haven as the value of fiat currencies like the US dollar comes into question.

Bobby Lee, CEO of Ballet and a crypto expert, said that Bitcoin can go up to $200k this year. Institutional money coming into Bitcoin may be the reason for this. This price increase may happen at the end of 2022

As compared to the past decade, crypto is becoming mainstream. Interestingly, the ongoing adoption of cryptocurrencies by the mass is increasing. Meanwhile, Bitcoin’s value is being driven up in large part by supply. BTC supply is dwindling. There are only ever going to be 21 million real BTC’s ever minted.

Another contributing value is that BTC value is well represented in Decentralized finance (DeFi). The platform allows BTC or any other cryptocurrency to be locked into a smart contract. The total value of DeFi grew at an exponential pace in 2020 and now amounts to over $40 billion in value. The takeaway here is that DeFi is growing and will continue to suck up BTC value and drive demand for BTC.

what makes BTC price go up
  Source: DeFi

BTC is Still Volatile

Yes, BTC and cryptos in general have been performing well setting all-new time highs. Despite that, some cryptocurrency traders and investors have not yet trusted crypto to be a store of value. Their trust is still based on gold and fiat currencies.

Recently, Dan Natha  explained his opinion on Bitcoin’s future. He is the Founder of Risk Reversal Advisors. Notable, the firm offers consulting services to investment advisors, investment banks, and private firms.

Nathan offered his view soon after the news of Tesla investing $1.5 billion in Bitcoin and planning to allow the cryptocurrency as a form of payment. In addition, he mentioned both Bitcoin and Tesla are two risk assets that gained over a trillion dollars in the past six months. It is all because of false hopes.

Companies such as JP Morgan say that Bitcoin’s price volatility may put corporations off from emulating Tesla’s decision to invest in the cryptocurrency. The main issue with the idea that mainstream corporate treasurers will follow the example of Tesla is the volatility of Bitcoin.

In a nutshell, Bitcoin took another large stride toward mainstream acceptance. The news of institutional investors placing investments in BTC caused a hike in price. Additionally, it increased the number of people interested in BTC. Another point is that as BTC soared it sparked heavy trading in cryptocurrencies on various exchanges. Therefore, with investors pouring out investments it is likely that the BTC price will rise again.

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Chloe Demir

A devoted news specialist who is passionate about the blockchain and crypto industry. She writes news and feature articles based on the latest developments in the market. She is always updated and on the go.

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