Key points: 

• The price of Bitcoin has been on a steady rise since March. It was until the recent price surge it began to have overwhelming attention amongst the populace.

• Several prominent figures, companies, and businesses have voiced strong support for Bitcoin.

• Bitcoin broke a key level of resistance, leading investors to believe there are other advantages.

• Many people have tried to answer the popular question behind the current rise in Bitcoin, by erroneously linking it to the rise that occurred in 2017. 

The current Bitcoin price is now well above $20,000, the highest it has ever been. Against all odds, the coin has managed to fight its way above the $3,000 - $6,000 price mark — a relatively steady price it has been valued at for some years now. 

Why did Bitcoin Suddenly Rise? 

Unlike the events that led to an increase in the price of Bitcoin in 2017, there are several factors we can see that has led to the current Bitcoin price today. From its growing adoption as a payment option from companies like PayPal, to key moves and statements that have been made by big investor companies. What’s more, Bitcoin's historical halving trend of controlling inflation reveals a bullish trend.

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Growing Adoption of Bitcoin as a Payment Option

Key Moves by Investors in the Bitcoin Crypto Space

Bitcoin Halving: Controlling Inflation

Growing Adoption of Bitcoin as a Payment Option

The e-commerce company, PayPal, recently announced the integration of cryptocurrency into its payment platform. This, according to them, was due to an overwhelming demand. About three weeks ago, PayPal confirmed that all their users can now access Bitcoin on the platform. 

Now, you can transact easily in Bitcoin with over 26 million merchants that make use of the PayPal platform. The announcement was immediately followed by an increase in the price of Bitcoin that shattered the $12,000 mark.

That’s not all. Other major payment platforms have also adopted Bitcoin as a payment option — Square's Cash app, Revolut, Magento and Bigcommerce, but PayPal is one of, if not the largest merchant network in the world. 

What is more amazing is how PayPal once questioned the digital currency, stating that it was unsuitable to be a real currency. Now, they are one of the big names that have accepted the digital currency today. 

Key Moves by Investors in the Bitcoin Crypto Space

Several prominent investors have said many positive things about the Bitcoin currency. Billionaire investor, Stanley Druckenmiller is one of them. He recently came out to say Bitcoin is a better bet than gold. In his words:

“I own many more times gold than I own Bitcoin, but frankly if the gold bet works, the Bitcoin bet will probably work better," His reason? "Bitcoin is more illiquid and has a lot more beta to it."

As at now, a total of 85,000 Bitcoin valued at approximately $695 million, has been bought by both Grayscale and CashApp. Another notable company that has invested in Bitcoin is MicroStrategy Inc. The company purchased 250 Million USD worth of Bitcoin (38,250 BTC) in September 2020, and today it is worth over 700 Million USD. That is an ROI of over 100 percent.

These key moves have been accompanied by public support, and many people are beginning to build more faith in Bitcoin by investing as well. 

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See Also: Companies That Have a Stake in Bitcoin Today

The best part about all of these is how JPMorgan Chase & Co., an American multinational investment bank with an asset worth 2.687 trillion USD recently stated that Bitcoin is in strong competition with gold and that the long-term potential for Bitcoin is considerable. This statement came three years after the CEO, Jamie Dimon, tagged Bitcoin a “fraud.”

Bitcoin Halving: Controlling Inflation

Let’s start with the Bitcoin miners who are rewarded with Bitcoin as a reward for processing transactions. The miners receive this reward through a built-in mechanism of the blockchain. To control the rate of inflation, the creator of Bitcoin included in its design, a code that will automatically cut the reward these miners receive while processing Bitcoins, into half every four years. This does not reduce the value of Bitcoin, but the stock-to-flow ratio of Bitcoin is doubled at every halving. 

New Bitcoins are introduced into the market when miners process blocks of transactions and the rate at which new coins are introduced is designed to slow over time. 

Case in point: growth has slowed from 6.9% (2016), to 4.4% (2017) to 4.0% (2018). Bitcoin’s supply is projected to grow by about 2.5 %  in 2020. This may create a scenario where the demand for Bitcoin rises faster than the supply, thereby making the price rise.

With these stable factors of limited supply in Bitcoin followed by an increase in use, it is safe to say that the price of Bitcoin is not about to fall anytime soon. This prediction is however subject to the actions of heavy market movers. Then again, what is an investment without its risk, right? 

Disclaimer: This article is not a recommendation by the writer to invest in cryptocurrencies. Given the unique circumstances of each individual, a qualified professional should always be consulted before making financial decisions. Cordial Exchange makes no representations or warranties as to the accuracy or timeliness of the information contained herein.

Unlike the events that led to an increase in the price of Bitcoin in 2017, there are several factors now, that has led to the rise of Bitcoin price today. The article brings out 3 leading factors that has led to this new development in 2020.