At this point in time, market data showcases that bitcoin is going through yet another bull run. In fact, it managed to surpass most of its recent yearly records, thus getting incredibly close to its previous all-time high of $20,000.
Right now, bitcoin is trading a little above $18,600. It is expected that this bull run will not end up in a massive correction that crashes the price and leads to another bear market. Things are drastically different this time around, and as part of this article, we will explore the main reasons behind bitcoin’s massive uptrend.
Cryptocurrencies are slowly entering the mainstream
Over the last couple of years, cryptocurrencies have become considerably more prevalent throughout the world. More and more people now understand what bitcoin is, with many others getting involved with altcoins. A good way to highlight the increased interest in cryptocurrencies is to consider search volume statistics. With this in mind, back in 2017 when BTC reached its all-time high, Google reported a global monthly search volume for the ‘bitcoin’ keyword of 2.5 million. This volume has now increased to over 8.9 million for November, thereby clearly indicating that this bull run is not a bubble.
The rise of institutional investors
Institutional investment funds like Grayscale are rapidly accumulating bitcoin-based wealth. At press time, the company holds over 500,000 BTC, which is valued at approximately $9.3 billion. From pension funds to central banks, more and more institutions are recognizing that bitcoin is here to stay. This directly leads to increased demand, hence driving the prices up.
DeFi is here to stay!
Over $12 billion in cryptocurrencies have been locked in decentralized finance contracts. Most analysts believe that the DeFi market will grow even more, as DeFi projects provide highly-innovative solutions to lending, borrowing, investing, and staking cryptocurrencies. We also ought to mention the fact that multiple companies are now migrating to a blockchain-based infrastructure to power up their day-to-day operations. Any growth in the crypto industry as a whole will likely have a positive impact on BTC.
Bitcoin’s price may also be influenced by a government crackdown on exchanges in China
China has never been shy to express its anti-crypto stance. With this in mind, the government recently cracked down on a number of local cryptocurrency exchanges. Miners are now reportedly finding it difficult to liquidate part of their bitcoin holdings. In response, the supply of newly-minted BTC remains relatively low while the demand continues to grow.
Bottom line
Based on these aspects, analysts suggest that bitcoin is on its way to reaching a new all-time high. Of course, there’s no upper limit to how high bitcoin’s value can grow. Many experts believe that bitcoin will reach values as high as $100,00 within the short-term future. It’s best to avoid speculating, but it’s important to keep an open mind, even towards such values.