From September 2020 to April 2021, Bitcoin Exchange Platform from the 7,661 US Dollar level to more than 53,620.00 US Dollar. After that, it fell to the low 22,980 US Dollar range, but again exceeded 7,661 US dollars and hit an all-time high that is more than 61,000 US dollars. 2020 to 2021 was a big year for bitcoin.
After seeing this, many people may want to start investing in bitcoin. But before that, you don’t know why bitcoin has risen so much. Before you rush to buy bitcoin, let’s know what’s going on right now.
Invest $30 trillion in cryptocurrency?
The astonishing research report to know what happened to bitcoin with some amazing findings.Nickel digital asset management surveyed bitcoin investment and they released that, on September 28, 62% of institutional investors will start investing in cryptocurrencies within a year.
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When cryptocurrencies such as bitcoin started to move significantly, many people want to open accounts with exchangers and start investing. In traditional banks, an account opening requires a few days or three days. This time, you will get to know the cryptocurrency exchange service that can open an account on the shortest same day.
Bitcoin goes from speculation to inflation hedge assets in 2020, the time the new coronavirus hit the world. To counteract this turmoil, central banks around the world have implemented large-scale monetary easing. The value of fiat currencies such as the dollar and the euro has declined due to the increase in the amount of money that is circulating in the world.
What is a stock-flow model?
This analysis is calculated by dividing the amount of stock present in the market by the annual supply of flow. Therefore, it is called a stock-flow model. It seems to be used as an analytical model to measure the rarity and value of products such as gold and silver.
Despite the increasing number of people investing in bitcoin, the rarity of bitcoin is increasing due to the declining supply. But, no one can surely say that the prices of bitcoin will rise as the stock-flow model in the future. Still, it would be safe to remember it as a reference.
18.88 million BTC (number of issued) ÷ 320,855 BTC (annual issue) = 57.473 BTC (as of December 1, 2021)
Increase in production (supply)
Most products in the world increase in production (supply) proportionally as demand increases. The reason for the popular product is that the enterprise can increase sales by producing a lot. However, as the number of distribution increases, the price settles down as the product inventory increases.
On the other hand, if we take the example of gold, there is a rarity that gold is only for 450m pools on the earth. So, it is limited. This will increase the price because it is not possible to increase the supply that can be produced for the demand present in the market. Gold, an age-old financial asset, continues to hit all-time highs despite numerous financial crises.
Likewise, the supply of bitcoin is limited. That is why bitcoin is also known as digital gold.At the time of its release, the bitcoin protocol fixed the number at 21 million. That amount of bitcoin can ever be mined. Already, nearly 19 million bitcoin have been created. Therefore, the value is increasing with the limited supply.
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Since 2020, bitcoin has been attracting attention as an asset in inflation hedging, as well as gold, it has gained attention with the announcement of Tesla’s purchase. Institutional investors are also investing in bitcoin, and it may continue to be chosen as a hot investment destination.
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When the value of a currency decreases, it is said that it is likely to become inflation when the value of things increases. Instead, it can be said that the value of stocks and gold tends to increase since it is possible to invest from a small amount of about $5 if you are interested, why not start preparing for purchase with Bitcoin Era?