Bitcoin hit a three-year high today, surpassing $19,860 on most exchanges, but has yet to break the historic high of 2017.
On the evening of November 30, 2020, bitcoin again stormed the coveted $20,000 level, which it approached as close as possible on November 18, 2017. Then the price spread was much higher, and on different exchanges and aggregators, the highs differed-from $19,666 to a short-term puncture of the” round ” figure of $20,000. Therefore, today, many media outlets have joyfully announced the overcoming of the historical maximum.
In fact, the time for the “Hodlers” to cheer has not yet come. Reaching $19,840 – $19,870 on various exchanges, bitcoin did not hold the bar and fell to $19,000, but then grew again. Price fluctuations near the historical maximum continue. Despite the next rebound, the bulls are unlikely to retreat, and after a short respite, they will start pushing the price up again.
The” bullish rally ” of bitcoin began in August after it became known about the large investments of the analytical firm MicroStrategy, and then several other companies. This helped the first cryptocurrency to return to the past peaks.
Quantum Economics analyst Jason Deane said that large companies that buy bitcoins are more likely to store them in the long term, rather than return them to the exchange depending on the price jumps. His assumptions are confirmed by the words of MicroStrategy CEO Michael Saylor, who believes that bitcoin is the best means to preserve values.
In October 2020, the example of MicroStrategy was followed by Square, owned by Twitter founder Jack Dorsey. Square bought 4,709 BTC worth $50 million, after which the rate of this crypto asset rose to $10,935. Later, the payment giant PayPal entered the “cryptocurrency arena”, announcing the addition of support for cryptocurrencies for American users, and next year – from other countries. Perhaps the rapid rise of bitcoin was influenced by further statements of the heads of large companies commenting on investments in this crypto asset, as well as the opinions of cryptocurrency enthusiasts.
American billionaire Stanley Druckenmiller believes that investing in bitcoin is much more profitable than investing in gold. A week ago, the CIO of the investment company BlackRock, Rick Rieder, also said that bitcoin is a reliable mechanism that can replace gold. Against the background of such positive statements and assumptions, in mid-November, the bitcoin exchange rate exceeded $17,000 and updated the maximum for 35 months.
According to experts of Binance Research, there are several other factors that can explain the growth of the bitcoin exchange rate. First of all, many investors see bitcoin as a protection against inflation. Given that governments continue to print money in times of crisis and pandemic, the value of even the hardest fiat currencies is falling. It is not surprising that people are beginning to perceive bitcoin as a “protective asset”. Increased regulatory scrutiny and the development of the futures market have been another factor contributing to bitcoin’s growth.
Today’s cryptocurrency market is significantly different from what it was in 2017. Over the past three years, the number of companies that comply with strict regulatory requirements and have received a license to conduct brokerage activities has increased. This has greatly simplified companies ‘ access to cryptocurrencies. We can say that now bitcoin is in “uncharted territory” and it is impossible to predict what lies ahead if it breaks the” cherished figure ” of $20,000.