Dec 22, · The World Economic Forum is an independent international organization committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas. Incorporated as a not-for-profit foundation in , and headquartered in Geneva, Switzerland, the Forum is tied to no political, partisan or national interests. Nov 14, · Bitcoin’s price has been increasing for months, and there are several reasons behind the surge. High-profile figures and companies have expressed support for Bitcoin. Other reasons include Bitcoin halving, which also has a direct impact on Bitcoin’s price. First Mover: Why Is Bitcoin’s Price Rising? Here Are a Few Possible Answers. Nov 24, at p.m. UTC Updated Nov 24, at p.m. UTC. Bitcoin's price is about to break a new all-time.
Bitcoin price rising whyWhy Bitcoin price is rising today?
This makes Bitcoin the only asset on the planet that we can prove has a finite and fixed supply. And I think a lot of them are actually thinking about the juxtaposition between digital currencies, like Bitcoin, which have verifiable scarcity and thinking about that in the context of Fiat currencies, like the US dollar which seemingly are being printed unlimitedly.
With further money printing on the horizon from stimulus packages, as well as talks of student loan forgiveness from the Biden administration, it is fair to say that inflation will continue, making the case for store-of-value assets more compelling. To further understand why Bitcoin has a verifiable finite limit to its quantity it is important to understand the mechanism built into its code known as the Halving.
Every , blocks that are mined , or about every four years, the reward given to miners for processing Bitcoin transactions is reduced in half. In other words, built into Bitcoin is a synthetic form of inflation because a reward of Bitcoin given to a miner adds new Bitcoin into circulation.
The rate of this inflation is cut in half every four years and this will continue until all 21 million Bitcoin is released to the market. Currently, there are Why is this important? As discussed before, the rising inflation and growing quantity of the US dollar lower its value over time. With gold, there is a somewhat steady rate of new gold mined from the earth each year, which keeps its rate of inflation relatively consistent.
With Bitcoin, each halving increases the assets stock-to-flow ratio. A stock-to-flow ratio means the currently available stock circulating in the market relative to the newly flowing stock being added to circulation each year.
Because we know that every four years the stock-to-flow ratio, or current circulation relative to new supply, doubles, this metric can be plotted into the future. Each halving Bitcoin has experienced a massive bull market that has absolutely crushed its previous all-time high. The second Bitcoin halving occurred in July of Should Bitcoin continue on this trajectory as it has in the past, investors are looking at significant upside in both the near and long-term future.
Some investment firms have made Bitcoin price predictions based on these fundamental analysis and scarcity models. As discussed, the narrative of Bitcoin as a store of value has increased substantially in , but not just with retail investors. A number of institutions, both public and private, have been accumulating Bitcoin instead of holding cash in their treasuries. Investments of this magnitude suggest strong confidence among these institutional investors that the asset will be a good hedge against inflation as well as provide solid price appreciation over time.
Aside from companies flat out buying Bitcoin, many companies are now beginning to provide services for them. Fidelity Digital Assets, which launched back in October , has provided custodial services for cryptocurrencies for some time, but they are now allowing clients to pledge bitcoin as collateral in a transaction.
The number of banks, broker-dealers, and other institutions looking to add such products are too many to name, but in the same way that a company must have confidence in an investment, it must also have confidence that the products that they sell have value.
Central banks and governments around the world are also now considering the potential of a central bank digital currency CBDC. This further lends merit to the concept of cryptocurrencies and their convenience in general.
From its initial primary use as a method to purchase drugs online to a new monetary medium that provides provable scarcity and ultimate transparency with its immutable ledger , Bitcoin has come a long way since its release in Even after the realization that Bitcoin and its blockchain tech could be used for way more than just the silk road, it was still near impossible for the average person to get involved in previous years.
Wallets, keys, exchanges, the on-ramp was confusing and complicated. Today, access is easier than ever. Licensed and regulated exchanges that are easy to use are abundant in the US. Custodial services from legacy financial institutions that people are used to are available for the less tech-savvy.
Derivatives and blockchain-related ETFs allow those interested in investing but fearful of volatility to become involved. The number of places that Bitcoin and other cryptocurrencies are accepted as payment is growing rapidly. It's just a much more robust 24 hour two-sided market that is starting to act more and more mature with every day that passes. Along with all of this, the confidence showcased by large institutional players by both their offering of crypto-related products as well as blatant investment into Bitcoin speaks volumes.
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