As the Bitcoin price rises to $ 18,000 and traders try to reach a full-time high, the wave of institutional investors continues to jump on the Bitcoin (BTC) bandwagon.
Institutional and individual investors want to acquire bitcoin this time, and data from the cryptocurrency derivatives markets show that institutional investors are pushing bitcoin volumes to new heights.
Bitcoin futures volume via the trading floor. Source: Data on digital assets.
According to research from Grayscale Investments, a digital asset management company that currently has more than $ 9.8 billion in assets, the coronavirus pandemic may be the main driver of Bitcoin’s current growth.
According to the company’s annual survey, 83% of all Bitcoin investors have started in the last 12 months, at a time when the COVID-19 infection has been minimal.
38% of all current Bitcoin investors surveyed have joined in the last four months, and 63% said that the economic crisis facing COVID-19 has had a positive impact on their decision to buy BTC.
Bitcoin became mainstream
Grayscale’s research also shows that Bitcoin is becoming increasingly popular with the general public and the investor class. The outlook for those who have not yet invested in Bitcoin has changed dramatically since 2019. In 2020, 55% of surveyed investors expressed interest in buying bitcoins, a significant increase from 36% in 2019.
Almost half of the respondents in the survey believe that cryptocurrencies will be considered the most important exchange medium by the end of the decade.
The trend of attracting investors to the concept of saving bitcoin is likely to increase, and mass adoption is likely to happen faster than most experts and investors expect. The least proof of this is a recent report from Citibank, which estimates that Bitcoin’s price may reach $ 318,000 by December 2021.
Will Bitcoin lose its appeal when COVID-19 disappears?
The question of how the Bitcoin price will react to eliminate COVID-19 is an urgent question for some investors. According to Jonathan Hobbs, author of Crypto Portfolio and former digital asset manager, the effects of the pandemic will appear long after the disease is under control. Hobbes told Cointelegraph:
“Covid-19 was the battle that lit the torch for institutional adoption. But fuel is piling up long before then. Now that the fires are burning, it will take a lot of water to put out. When the world finally recovers from Covid-19, the economy will still be in central bank printing of money to try to write off that debt, as it did after the financial crisis in 2008. This means that the institutional narrative that Bitcoin is an inflation hedge is likely to persist long after the pandemic ends. ”
It is clear that the enormous economic stimulus and expansion of monetary policy as a result of the negative effect of the Coronavirus has transformed the economic landscape in the foreseeable future.
While some analysts may overestimate the impact of the Coronavirus pandemic on Bitcoin’s increase in 2020, this has clearly played a role in boosting investor interest in cryptocurrencies.
One of the most important things identified by investors is lowering Bitcoin’s entry barrier and its apparent ability to add value in the face of fluctuations in traditional markets. These factors are likely to persist even after the pandemic is over.