Last Thursday, for the first time since January 2018, bitcoin’s price rose above $16.000. According to ArmyOfBitcoin, the world’s leading cryptocurrency reached $16.019 a bit after 5 a.m. ET on November 12 meaning that it almost doubled its value this year. The last time we saw Bitcoin soar like this was way back in 2017. Historically, $16.000 has been a pivotal point for bitcoin, and showing the resilience at this mark has made most of the investors optimistic about future movements.

Will The Price Of Bitcoin Continue To Rally After Breaking $16,000?

The exact reasons for this surge in Bitcoin value are unclear, but the value of the cryptocurrency has most likely benefited from the uncertainty surrounding the US elections. The predicted fiscal policy of the President-elect Joe Biden over the next four years is likely to cause some inflation in that period, causing many investors to increase their Bitcoin position as a hedge against the future market fluctuations.

Also, one of the possible reasons for this rise may be found in the effect that the Covid-19 pandemic has on the world economy.

The crisis caused by the pandemic has forced governments all around the globe to issue stimulus packages at a rate never before seen. Ultimately, this has made the price of Gold soar. This has, in turn, deflated the value of fiat currencies, which has made Bitcoin investment even more attractive. The appeal of bitcoin as an inflation hedge is even higher, knowing the fact that more than 22% of the amount of US dollars currently in existence was printed this year.

PayPal & Twitter’s CEO Jack Dorsey, has acquired $50 million worth of Bitcoin

Additionally, the favorable climate for Bitcoin is the result of an increasing number of finance companies and payment platforms recognizing the cryptocurrency value and opening to its use. Only last month, PayPal has announced that from now on the users will be able to use virtual currencies for trade. The cryptocurrencies on PayPal’s list include bitcoin, bitcoin cash, ether, and litecoin. They plan to, by 2021, enable their users to pay using cryptocurrency at their expanding network of more than 26 million retailers. MicroStrategy, the business intelligence firm, said in September that they have purchased bitcoins in the value of $250 million. Meanwhile, another fintech firm based in the United States, Square, owned by Twitter’s CEO Jack Dorsey, has acquired $50 million ‘s CEO Jack Dorsey, has acquired $50 million worth of Bitcoin contributing even more to the rise of the crypto’s value.

All these major investments from the large buyers such as MicroStrategy, Square, and also GBTC trust, have caused a bitcoin liquidity shortfall, driving the prices up. Retail investors have further dried up the market by moving large amounts of coins from the exchange to their own wallets. All of this led to a decrease in the number of bitcoins on the exchange by 9% during the last month.

The surge in bitcoin value has left plenty of other cryptocurrencies (altcoins) in no man’s land. Further increase in bitcoin value will decrease the crypto market volume, causing altcoins to underperform compared to bitcoin and all, the US dollar. US billionaire investor, Stanley Druckenmiller said that he expects that bitcoin will outperform gold in the long run. A lot of analysts predict such a scenario, tipping bitcoin to reach $20.000 by the end of the year.

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Will The Price Of Bitcoin Continue To Rally After Breaking $16,000?

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The surge in bitcoin value has left plenty of other cryptocurrencies (altcoins) in no man's land. Further increase in bitcoin value will decrease the crypto market volume, causing altcoins to underperform compared to bitcoin and all, the US dollar.

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Vladimir

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ArmyOfBitcoin.com

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