Nowadays, the prices of cryptocurrencies most especially Bitcoin have continued to soar higher than ever. Despite the global pandemic wreaking havoc on all significant economies of the country, the cryptocurrency market has continued to boom.
For the first time in history, Bitcoin’s price broke above $50,000 thereby continuing its blistering rally as major companies appear to be warming to cryptocurrencies. According to data from coin metrics, the world’s largest digital currency by market value rose more than 3% to an all-time high of $55,801.90 today.
Similarly, several cryptocurrency prices have been on the rise and investors can’t fathom why their prices are on the rise. As a result, we have highlighted the key reasons why cryptocurrency prices are rising:
Safe-haven Asset
Cryptocurrencies, especially Bitcoin, are now being regarded as a safe asset against market inflation and volatility. As a result, there is a recent trend among public companies to convert their cash treasuries into cryptocurrency. For example, Microstrategy – a public listed company in the US considers Bitcoin to be a better store of value. Consequently, they converted $425 million of cash into Bitcoin.
PayPal and Cryptocurrencies
In October 2020, the global digital payment company Paypal announced that it would launch cryptocurrency trading on its platform. The launch included four major trading currencies: Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. Paypal also announced plans to allow transactions using these cryptocurrencies.
Therefore, this simply means that PayPal’s 350 million users are now capable of adopting crypto as a means of payment.
Furthermore, many governments are also trying to regulate the market as several private investors seek to regulate cryptocurrency as a means of exchange. Thus, countries like Germany, the USA, Japan, etc. have taken a positive stance on cryptocurrencies.
Easier Access To Public
Due to its popularity, cryptocurrency is a digital currency that can be used as both a mode of exchange and a store of value. It has established itself as a new asset class over the past decade even though it has just started to gain attention as a legit payment method. As a result, to provide access to crypto investment, several platforms have been launched and funded in this area.
Therefore, more retail investors want to invest in the asset class and are willing to pay more. This is because cryptocurrencies have become more accessible to the general public.
If you think it’s too late to invest in cryptocurrencies due to rising prices in the cryptocurrency market, understand that this is only the beginning. This is because cryptocurrencies will become more mainstream as more countries seek to regulate the crypto market.
