Why does the gold BTC in the digital currency attract more funds?

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sinceBTCAfter breaking through the 20,000 mark, BTC has attracted the attention of the industry. After BTC broke through the 20,000 mark on the evening of December 16, the momentum of BTC remained undiminished. On December 26 and 27, it broke through 25,000 and 27,000 US dollars successively, making The influx of investors into the encrypted digital currency market has also caused certain changes in the main structure of BTC, and it will also make more people feel that it will be more and more difficult to own 1 BTC, so why does BTC attract more and more people? How many people come to invest?

2. The price went up again at the end of the year, what is the reason behind it?

Why Bitcoin soared all the way at the end of this year, Xiao Z summed up the following reasons:

2.1 Bitcoin's investment preservation function is its essential reason

Bitcoin is seen by some as a store of value and a partial substitute for gold. With the development of the digital currency industry and blockchain technology becoming more and more mature, and one of the most widely used blockchain technology is digital currency, and Bitcoin can be said to be the originator of the current digital currency. Up to now, it has attracted more and more people to invest in it, which is unmatched by many digital currencies. Many people even say thatBTCAs the gold in the digital currency, it can also be seen from this point that it has a high investment value.

The relatively stable increase in the price of Bitcoin in the past year has brought great benefits to many investors, thus attracting more and more people to join the ranks of investment and boosting Bitcoin all the way up.

2.2 The entry of institutional investors is the direct cause

Holding Bitcoin can more effectively prevent inflation, and for some institutions,BTCIt can be used as an investment method. The participation of more institutions has promoted the prosperity of Bitcoin, such as payment service providers Square, PayPal, etc. The increasing compliance and growth of Grayscale’s Bitcoin Trust Fund (GBTC) is also a highlight . It has been buying Bitcoin continuously since its inception, which is also the reason for pushing Bitcoin to new highs. According to some data, the total open interest of GBTC is close to 570,000, an increase of 58.3% in less than half a year compared to the 360,000 open interest in early June. This shows that in the second half of this year, a large amount of institutional funds began to pour into the Bitcoin field.

2.3 Changes in the global macro economy are driven by external factors

In 2020, we have experienced a "new crown pandemic" that has not been seen in a century. In response to the economic recession brought about by the epidemic, countries have adopted loose monetary policies, and interest rates have been lowered repeatedly. On the one hand, affected by the epidemic, the global economic recovery has slowed down this year; on the other hand, the central bank's loose monetary policy has pushed up inflation expectations in the financial market. In an economic environment of high inflation, low growth, and negative interest rates, in order to avoid damage and pursue higher returns, investors' demand for hoarding cash has naturally evolved into a demand for gold and a gold substitute—Bitcoin.

3. What is the future of Bitcoin?

Recently, the price of Bitcoin has been soaring, followed by drastic changes in the market and a sudden increase in investment risks. AlthoughBTCIt has a high investment value, but we have our own opinions and ideas when investing, we must not invest blindly, and we must also learn to avoid risks. After all, any kind of investment has certain risks.

The above are the reasons why the price of Bitcoin is soaring and worthy of investment as explained by the editor. I believe you will have an understanding of your own investment in Bitcoin. What else is worth investing in Bitcoin or what should we do when we invest in Bitcoin? To avoid risks? How do you think the price of Bitcoin will develop in the future?

『Disclaimer: This article is the author’s independent point of view and does not represent the official position of the coin. This content is only for the learning and communication of friends in the coin circle. It does not constitute investment opinions or suggestions. Please treat it rationally, establish correct concepts, and increase risk awareness. 』

『Disclaimer: This article is the author’s independent point of view and does not represent the official position of the coin. This content is only for the learning and communication of friends in the coin circle. It does not constitute investment opinions or suggestions. Please treat it rationally, establish correct concepts, and increase risk awareness. 』