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As the price of Bitcoin rises towards $ 18,000 and traders attempt to set a new all-time high, the wave of institutional investors jumping on the Bitcoin (BTC) bandwagon continues.
This time around, institutional and retail investors are both keen to rack up Bitcoin, and data from crypto derivatives markets shows institutional investors are pushing Bitcoin volumes to new highs.
According to research from Grayscale Investments, a digital asset management company that currently has more than $ 9.8 billion in assets under management, the coronavirus pandemic could be a major driver of the current Bitcoin rally.
According to the company’s annual survey, 83% of all Bitcoin investors started in the past 12 months, a time when COVID-19 infections were minimal.
38% of all current Bitcoin investors surveyed have joined in the past four months, and of these, 63% say the economic disruption caused by COVID-19 has positively influenced their decision to buy BTC.
Bitcoin becomes mainstream
Grayscale’s survey also shows that Bitcoin is increasingly common among the general public and the investor class. The outlook for those who have not yet invested in Bitcoin has changed significantly since 2019. In 2020, 55% of investors surveyed expressed interest in acquiring Bitcoin, a substantial increase from 36% in 2019.
Almost half of survey participants believe cryptocurrencies will be considered a mainstream medium of exchange by the end of the decade.
The trend for investors to be drawn to Bitcoin’s store of value narrative is likely to increase, and mainstream adoption may occur sooner than most pundits and investors expect. . Minimal evidence of this comes from a recent report from Citibank, in which the author estimates that the price of Bitcoin could reach $ 318,000 by December 2021.
Will Bitcoin lose its appeal once COVID-19 is gone?
The question of how the price of Bitcoin will react to the eradication of COVID-19 is a valid question on the minds of some investors. According to Jonathan Hobbs, the author of The crypto wallet and a former digital asset fund manager, the effects of the pandemic will be felt long after the disease itself is brought under control. Hobbs told Cointelegraph:
“Covid-19 was the match that kindled the flame of institutional adoption. But firewood accumulated long before. Now that the fire is burning, it will take a lot of water to put it out. When the world is finally cured of Covid-19, the economy will still be sick with debt. And central banks will continue to print money in an attempt to inflate these debts, as they have done since the 2008 financial crisis. This means that the institutional narrative that bitcoin is a hedge against inflation is likely to continue. long after the pandemic has ended.
Clearly, the massive economic stimulus and expansion of monetary policy resulting from the negative effects of the coronavirus have changed the economic landscape for the foreseeable future.
While some analysts may overestimate the impact of the coronavirus pandemic on Bitcoin’s 2020 rally, it is clear that it has played a role in accelerating investor interest in cryptocurrencies.
One of the main advantages identified by investors is Bitcoin’s low barrier to entry and its proven ability to gain value in the face of volatility in traditional markets. These factors are likely to continue to hold, even when the pandemic ends.
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