The cryptocurrency market has surprised traders and analysts in 2021. Every artificial ceiling on prices has come to pass, as Bitcoin doubled in the past two months. Accordingly, many are bullish on the current crypto market cycle. All stakeholders within this industry are hoping that the historic surge goes further. Be it HODLers, crypto gambling enthusiasts, day traders, and all other participants, there is much to gain for them all in a soaring market. Investors seem confident that this asset class is on a solid footing. DeFi platforms and the best crypto games reflect this enthusiasm. Moving forward, analysts are keen for growth indicators on the horizon. It is difficult to nail crypto markets, and forecasts can be wildly inaccurate. Regardless, the momentum seems to be in one direction. The following factors are going to play a vital role in that surge:
Institutional Adoption
This development is what differentiates this cryptocurrency rally from previous ones. Institutional investors have gotten into the market in droves. Tesla’s $1.5 Bitcoin investment was a home run for this asset class. It is no longer a fringe asset, championed primarily by small-scale investments. Now, Bitcoin has increasing appeal as a safe-haven asset against market volatility and inflation. MicroStrategy is another institutional investor in Bitcoin with a balance sheet of about a billion dollars. Grayscale is a significant player in Ethereum investments. Therefore, Wall Street and institutional investors have made their mark. This climate of speculative investments favours cryptocurrency. With more liquidity expected with President Biden’s stimulus package, investors are looking for an alternative store-of-value asset. Accordingly, it is a logical conclusion that Bitcoin and crypto platforms will continue to attract more investments. These large investments have made services like Uniswap exponentially bigger. Some within crypto will naturally warn against large-scale investors. However, top cryptocurrencies like Bitcoin are secure enough. Billion-dollar investments are not an immediate threat to decentralisation.
Attitudes to Cryptocurrency Remarkably Positive
There will always be a speculative element about Bitcoin. This speculation brought scepticism in the past. Billionaire entrepreneur Warren Buffet is perhaps the most famous critic of Bitcoin. A significant change in attitude is JP Morgan. In 2017, the company’s CEO, Jamie Dimon, called Bitcoin a fraud. Last year, the bank referred to Bitcoin as a viable competitor to gold, with tremendous upside. Hedge fund billionaire Paul Tudor Jones has compared investing in Bitcoin to early tech. This shift in attitude from the moneyed class reflects overall attitudes toward crypto. Most people no longer see Bitcoin as a fad. Crypto is here to stay.
Bitcoin Always Rebounds After Corrections
Cryptocurrencies have shown remarkable resilience and will continue to do so. Last week, Bitcoin dipped below $50k again. Inevitably, bearish analysts started claiming that the rally may have peaked. They failed to account for Bitcoin having a similar correction when it crossed $40k. Even if there is a significant correction, this asset has always rebounded. Therefore, there is no reason to panic sell, especially for long-term traders.
Crypto Purchases Getting More Accessible
Part of institutional participation in cryptocurrencies is the facilitation of crypto purchases. PayPal was a significant entrant in the past few months. The money transactions giant announced in October that it would add crypto purchases to the services its users can enjoy. The range of options is still limited, with only leading coins like Bitcoin, BCH, Litecoin, and Ethereum on offer. Nonetheless, these are what most of the market trades. Most gamers wager to use these coins even on crypto gambling platforms like BC.Game. Accordingly, more institutions are positioning themselves to harness the crypto boom. Tesla began accepting crypto payments as part of its investment in Bitcoin. These options will increase the usage options of cryptocurrencies for users. Accordingly, more utility will ultimately be fantastic for prices fueling more bullish sentiment.
Bitcoin Supply Fixed, Ethereum Has a Decreasing Inflation
The supply of Bitcoin is a finite 21 million. This supply is useful for investors looking to store value. At a time when cash printing machines are on overdrive, this asset is very appealing. For centuries, gold has served this role. Bitcoin has acquired the moniker of “digital gold,” and for a valid reason. Bitcoin has a fixed supply, similar to gold which is difficult to mine. It has the additional advantage of being a digital asset. This fact makes the acquisition and transfer of Bitcoin more convenient. Gold is bulky and expensive to store. Moving forward, Bitcoin will grow in stature as a store of value. There is little doubt that its current value is only a fraction of what this asset could be worth. Ethereum has a decreasing inflation model that will also stabilise its value. Even though it does not have a fixed supply like Bitcoin, this model is vital for making this asset appealing.
Conclusion
Cryptocurrency has done better talking than its most ardent believers ever hoped. This asset has truly arrived. There may be bumps along the way, but the overall trajectory is positive. A market correction is an outlier in the long-term movement of this asset class. The factors above make for a lucrative future.
