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Five reasons why Bitcoin has reached the $ 48,000 level


 Five reasons why Bitcoin has reached the $ 48,000 level

Bitcoin (BTC) price rose to all-time highs and continued to climb to new highs.

According to the latest data from the Binance platform, the price of Bitcoin has increased by 20.51% in the past 24 hours, surpassing $ 48,000.

Meaning that Bitcoin has set a new record, surpassing what was recorded over the past period at $ 42,000.

According to AssetDash data, the current market value of Bitcoin exceeds $ 870 billion.

Compared to the large market capitalization of some well-known stocks, Bitcoin ranks seventh, overtaking Facebook and Tesla.

In the following, we will learn about five main reasons why Bitcoin's price has risen above $ 48,000.

Five reasons why Bitcoin has reached the $ 48,000 level

1- The influence of Tesla CEO Elon Musk on Bitcoin

Tesla Corporation became the world's largest car company by value last year.

The Tesla CEO updated his Twitter profile with the hashtag “#Bitcoin”, indicating a strong interest in Bitcoin, and indicating that he is optimistic about Bitcoin's future.

Late Monday evening in the US, Tesla announced in its annual report to the Securities and Exchange Commission (SEC) that it had invested $ 1.5 billion in bitcoin as part of the company's new investment policy.

Under the insane hype and promotion of Bitcoin by the CEO of Tesla, Elon pushed the price of Bitcoin to new heights.

Paolo Arduino, Bitfinex Technical Director, commented on the recent appreciation of Bitcoin by saying: 

Today's rally in Bitcoin, reaching an all-new high, comes after Tesla's investment of $ 1.5 billion.

Tesla's investment diversification policy is adding further momentum to Bitcoin's rally as institutional investors flock to the king of cryptocurrencies.

Plate tectonics have changed the global investment landscape.

Ethereum and altcoins are shown in green, while Tether is making its way towards market capitalization of $ 30 billion.

2- Institutional increase in turnout 

On October 21, 2020, Paypal, a major electronic payment company, announced that it will launch a new service that allows users to buy, hold and sell cryptocurrencies directly from PayPal accounts.

Meanwhile, large companies such as Square Inc. have also announced the purchase of Bitcoin.

More companies are set to enter the cryptocurrency market in the future.

Digital asset management company Greyscale purchased 73,000 Bitcoins in December 2020.

The "Diamond Motion" company has also invested $ 100 million.

According to analysts "Royal Bank of Canada", Apple could be the next big company to invest in bitcoin.

3- The trend of digital currency is becoming clearer

More and more national central banks are experimenting with CBDC digital currencies and speeding up the process of digital currencies, which is also one of the reasons for the rise in Bitcoin.
      China has already experimented with digital renminbi in Shenzhen, Suzhou, Chengdu and Beijing.

Japan is developing the digital yen.

The US Central Bank is also in the early stages of studying digital currencies.

Bank of England Governor Mark Carney called for a new virtual reserve currency before he quit.

4- The depreciation of the US dollar and the increase in inflation expectations for global goods

Due to Republican opposition, Biden's new round of economic stimulus amounts to nearly $ 1 trillion.

However, according to the latest news, the size of the new round of relief aid planned to counter the Coronavirus may greatly exceed all expectations, and the aid is now set to cost about $ 1.9 trillion.

The House of Representatives approved the budget decision last Friday, increasing risk appetite in the market and inflation expectations that effectively support the price of gold and bitcoin and the continuation of the hedge once again against the mainstream inflation narrative.

The US 10-year parity rate (the difference between a 10-year nominal U.S. Treasury and a 10-year Treasury Inflation Protected Bond) rose significantly, reaching a high of 2.22%, surpassing the 2018 high of 2.2078% in addition to the highest Level since 2014.

In the Fed's active monetary easing policy, inflation continued to rise and the dollar continued to decline.

Due to the limited number of bitcoins, as the total supply was closed at 21 million bitcoins, which means that it is more scarce and can hedge against the depreciation of the low dollar.

At the moment, Bitcoin can actually be used as an official currency in some countries for purchasing goods, financial transactions, and other activities.

At present, the dollar's inflation rate remains elevated.

Under this circumstance, Bitcoin is expected to become a valuable and global currency that can hedge against the risk of misuse of the US dollar.

Thus, Bitcoin has become a hedging tool, beloved by the market, causing the Bitcoin price to rise to an all-time high.

5- The rise in the value of gold

Spot gold prices continue to rise, they are still in a bullish channel, and continue to push to reach new highs at $ 1838 an ounce.

As the Spring Festival holiday approaches, the demand for gold has increased in the Chinese market, and the demand for physical gold in China has increased over the past week.

Due to the strength of the gold price, cryptocurrencies like Bitcoin that have the same risk hedging characteristics as gold also have a partial bullish correlation.

The price of Bitcoin is currently estimated at $ 46,700, according to "Coingecko", with a trading volume of $ 88 billion in the last 24 hours.