In 2020, Bitcoin has broken all previous records after claiming $28,000 over cryptocurrency exchanges. Behind such a fabulous performance, there is a role of various key factors, such as halving, the stimulus package, institutional investment, and preference of Bitcoin over gold.
The game started with the halving, which occurred in the first half of 2020, as the event reduced the supply of the top digital asset in the markets. Scarcity is the most impressive feature of the flagship digital currency that makes it superior over other digital assets. Before halving, some financial experts gave their high predictions but their speculations did not come true immediately after the halving event. Halving has introduced a factor of supply shortage, which has pumped the price value high.
The Coronavirus pandemic created a disastrous situation in the financial world. In order to sustain the economic environment and to support small businesses, the Fed introduced a stimulus package worth billions of dollars. The initiatives of the central bank further encouraged investment companies and firms to go for assets that were resistant to inflation.
In mid-March, the traditional markets witnessed a historic loss, and billions of dollars washed away as a result of the market crash. Following a massive crash at a macro level, Bitcoin also plunged. As per the on-chain analytics, the top digital asset lost half of its value in a single day.
In August, giant investment firm MicroStrategy decided to invest in crypto products. The investment company bought BTC worth approximately $425 million. After MicroStrategy, a lot of investment firms joined the crypto space and injected millions of dollars into the flagship cryptocurrency.
Online payment processor PayPal also enabled its customer base to utilize Bitcoin and other top digital currencies in payments. Mastercard and Visa have also released reports on digital assets and expressed their interest in the crypto industry.
Recently, One River Digital Asset Management announced to invest $1 billion in Bitcoin. “There is going to be a generational allocation to this new asset class. The flows have only just began,” said Eric Peters- the CEO of One River Asset Management.
Based on the year to date performance, the top digital asset has outshined gold. Investors are preferring Bitcoin over gold due to its high potential.
At press time, the top digital coin is trading at $26,436 after a slight decrease of 2% over the day.