New Delhi: Following the global financial crisis over a decade ago, the value of Bitcoin has smashed the $20,000 barrier, for the first time since its emergence.
The digital currency was trading at a lowly $5,000 as recently as March this year. However, over the last year, Bitcoin has gained over 170%.
The recent rally has naturally led many to seek out a definitive answer to its underlying reasons.
Since 2017, Bitcoin's market cap has significantly risen and stood at roughly $345 billion only weeks ago. This rally is simply a result of an increase of number in investors, and more specifically those with deeper and heavier pockets.
The COVID-19 pandemic has witnessed central banks across the world print money at unprecedented rates, with governments scrambling to dole out blockbuster stimulus packages to help their investors over the economic crisis.
Early proponents of Bitcoin had argued that the huge inflationary pressure that such spending is likely to place on economies, is going to be one of the key reasons to turn to the cryptocurrency as a safe-haven asset.
Given the continued uncertainty over the economy during such trying times, several investors have indeed come to view Bitcoin as a premier asset to ward off conventional equities.
The rising demand for Bitcoin in North America has also seen a surge of over 200,000 Bitcoin flow to the continent from East Asia. A greater focus from institutional investors has bounced the digital currency in recent months.
However, with the news of COVID-19 vaccine and its uncertainty around who will be at the helm of the United States from January, it remains a mystery as to who will be Bitcoin's rally.
Some observers have said that the increased crackdown on cryptocurrency exchanges in China in order to counter money laundering activity may have led to a bottling up of supply.
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