Bitcoin is the frontrunner when it comes to cryptocurrency. While Bitcoin has been around for some time now, it continues to surge in popularity. If you’ve been paying attention, you may have noticed that the price for Bitcoin has been going up very quickly. There are several reasons for this. Here are a few of them.
Reasons For Bitcoin’s Surge:
1. Broke Resistance
One of the main reasons it has skyrocketed in value has to do with the fact that it broke a key resistance point recently. Investors that use technical analysis are likely to be very ‘bullish’ on Bitcoin if it looks good from a technical perspective. Likewise, everyone looks at the same charts. Therefore, you have a bunch of people seeing the same thing. The charts can tell you a lot of the story. Bitcoin was being held back by a resistance level and just like a stock when it breaks it, the flood gates open.
2. Better Acceptance
Another reason why Bitcoin has continued to surge is due to the rumors and the news coming out among heavyweights in the space like PayPal. You have big players in the financial industry like PayPal and even Square who are adopting a digital currency as the future. This alone has made investors look at Bitcoin even more favorably. After all, if the big players in the space are already doing what they need to do to position themselves for widespread adoption, it is likely coming. Therefore, it is giving investors a reason to jump in right now before it gains mass adoption.
3. Inflation Worries
Inflation is something that investors are always worried about. As the dollar continues to suffer from inflation, investors are looking for ways to hedge against it. As more money is pumped into the economy, the dollar’s value decreases. This happens at a rate of around 2 percent each year. This is what pushes a lot of investors to things like gold or silver. If you are invested in other assets, you can minimize the loss you experience from inflation. No one likes to see their money decrease by 2 percent. While it doesn’t sound like much, that 2 percent compounds year by year and it becomes significant. By buying Bitcoin or another form of digital currency, you can effectively hedge against inflation because Bitcoin won’t suffer the same devaluation that is happening to paper currency.
As you can see, there are plenty of things that are leading to the rise in Bitcoin’s price. The fact is, the price is likely to only go up as more banks and more institutions come on board. It is clear to see that digital currency will be the way forward. While not everyone is as ‘bullish’ on the potential of Bitcoin, many investors are. Because Bitcoin’s supply is limited, it will continue to drive up the price as long as investors maintain the same enthusiasm going forward. It will be interesting to watch, to say the least.