What events in 2020-2021 turned Bitcoin into a Treasured Asset

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Previous analysis of Bitcoin's price made the case that its price was a function of its velocity or its use as a currency for daily transactions and trading. But crypto trading volumes are a fraction of their mainstream counterparts, and Bitcoin never really took off as a medium of daily transaction. This is partly due to the fact that the narrative around Bitcoin has changed from a currency to a store of value, in which people buy and hold for long periods of time rather than use it for transactions.

Which Factors Influence Current Bitcoin Price?

• Institutional investors - Interest from institutional investors has also cast an ever-lengthening shadow on Bitcoin price workings. In the past 10 years, Bitcoin has pivoted away from retail investors. And now it has become an attractive asset class for institutional investors. This is perceived as a desirable development because it brings more liquidity into the market and dampens volatility.
• Hedge against inflation - The cryptocurrency’s most recent rally in 2020 occurred after several respected names in finance spoke approvingly of its potential to develop into a store of value to hedge against inflation from increased government spending during the pandemic. The use of Bitcoin for treasury management at companies also strengthened its price in 2020. MicroStrategy Inc. (MSTR) and Square Inc. (SQ) have both announced commitments to using Bitcoin instead of cash as part of their corporate treasuries.

• Finding real-world applications using blockchain technology such as the Altcoin Cardana working on the security of medical records or Enjijn securing online gaming transactions. These industry developments are the third major influence on Bitcoin's price. Bitcoin’s unique underpinnings, which span tech and finance, mean that these developments pertain to both industries.
Read the full article on Crypto Nation Network https://cryptonationnetwork.com/bitcoin/

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