Why is Bitcoin rising? Here are the reasons behind the increase
The price of Bitcoin is experiencing a dramatic increase. That’s why many people wonder why the price increase in Bitcoin. Why Is Bitcoin, which fell to $ 3,700 last March, rising? Why did Bitcoin rise when the dollar depreciated around the world and gold hovered far from its peak?
Corporate companies buy Bitcoin
The first reason for the rise in bitcoin is the bitcoin purchases of corporate companies. Many large companies around the world have turned to Bitcoin buying in 2020, seeing Bitcoin as an alternative investment tool to gold. MicroStrategy, a US-based software company, for example, bought 40,824 bitcoins alone. The value of these Bitcoins is $ 910 million at current prices. Not just MicroStrategy, but another company that gets Bitcoin is Square, the big payments company, with Twitter CEO Jack Dorsey again taking over as CEO. Square announced it had received 4,709 Bitcoins last October.
Those companies, as well as investment firm Ruffer, recently announced that it had invested $ 744 million in Bitcoin in November. Companies aside, some of the leading names in the financial world have also turned to Bitcoin this year. Famous billionaires Paul Tudor Jones and Stanley Druckenmiller can be cited as examples.
Payment giants like PayPal begin offering Bitcoin trading
Companies and some leading names in the financial world have bought Bitcoin, while global payment giants such as PayPal have started offering cryptocurrency trading services. This, in turn, was another factor that increased demand on the part of individual investors. PayPal is widely used worldwide today, and the app has more than 300 million users. By comparison, the number of investors and users available in cryptocurrency markets is expressed at 50-60 million.
Bitcoin’s supply is limited
At this point, it is important to note that Bitcoin is a limited asset. When companies, famous investors and companies like PayPal Buy Bitcoin, there is no unlimited supply of Bitcoin. Bitcoin can only be produced 900 units a day. It’s impossible to get above that figure. Therefore, since supply is limited, when demand is excessive, the price also increases accordingly.
Asset managers, hedge funds, investment companies are taking positions in Bitcoin against the risks of the US Dollar. Bitcoin is seen as a hedge against inflation. Bitcoin, on the contrary, is released with a limited supply, while the US Dollar is printed endlessly. In addition, every four years the supply of Bitcoin is reduced by half. According to bitcoin’s system, this has to happen, and it is practically impossible to change it.