After a year full of financial turmoil and seeing its price suffer through a daily average rate of -0.33 percent (the lowest in 9 years), Bitcoin, the world’s first and most highly valued cryptocurrency has started 2019 on a very solid ground.
- On Tuesday, Bitcoin’s price soared to a 40 day high of USD $4000.
- Bitcoin transaction volume also reached a 9-month-high.
- The total market valuation of the cryptocurrency industry surged $15 billion in 48 hours.
Here are some facts and reasons which underline the current ascent in the value of Bitcoin.
Institutional investors entering the cryptocurrency sector
Cryptocurrency will grow bigger and really arrive when institutional finance makes it’s way into the crypto market. Big finance will infuse the crypto industry with much needed value and open the floodgates of capitalization and institutional expertise. 2019, seems to be the year when institutional finance starts hodling as much cryptocurrency (prefarably, BTC) as it can get.
On February 11, NASDAQ, the second largest stock exchange in the world, launched indexes for BTC and ETH. This showed how seriously Wall Street is taking cryptocurrencies and that NASDAQ is moving forward quickly with its new financial product with an option to trade Bitcoin futures
Major US Bank JP Morgan with assets worth $2.6 trillion announced it’s entry into the crypto world when it launched it’s own cryptocurrency JPM coin
Intercontinental Exchange, the company which owns the New York Stock Exchange announced last year that it would create Bakkt, a global cryptocurency exchange, working with Microsoft among other major partners. By the end of December, it had already raised $182 million for Bakkt.
Fidelity Digital Assets
Fidelity Investments, a Boston-based financial services company with $7.2 trillion worth of assets under management for 27 million clients, announced it would be launching a Bitcoin custody service in March called Fidelity Digital Assets.
Acquiring Crypto made easier by Exchanges and Wallet services
It’s pretty easy to buy and trade cyrptocurrencies in 2019 due to the various crypto wallet and crypto exchange platforms available, which has driven unprecedented crypto market liquidity to fruition
- Square Cash App, one of the most widely used mobile payment applications in the U.S Market lets users buy and sell Bitcoin and also has a wallet custody service
- Binance, the most voluminous crypto trading exchange on the planet allows users to buy and sell crypto with credit cards using Visa and Mastercard
- Spend, a company which has its own website and app allows users to buy, sell, store and exchange crypto to fiat on the fly.
- Coinbase, a San-Francisco based cryptocurrency exchange platform has over 25 million users on its platform.
UK is set to leave the European Union on 29th March 2019 having a significant impact on global market and world affairs. The value of sterling pound is supposed to decrease, opening the demands of cryptocurrency, specifically Bitcoin as an alternative monetary exchange in Northern Ireland. Read the detailed report here.
Currency crises playing an important role in the ascent of Bitcoin
Venezuela is facing political upheaval and a currency crisis as a result of the Chavismo communism. The disastrous hyperinflation has led to an insatiable demand for Bitcoin in Venezuela.
Development of more channels for Bitcoin to flow through using Second Layer Technologies
One of the major drawbacks of Bitcoin is it’s insistently deflationary monetary design which leads to great congestion on its network. For the use of Bitcoin as an instrument for daily small cash payments, developers have carefully used second layer technologies to craft many tributary channels of liquidity. Recently Fold, a crypto payment startup announced that it would accept Bitcoin payments on the Lightning Network for buying Domino’s Pizzas for an extremely low transaction fee.
More Governments getting into Crypto
Venezuela starts regulating Cryptocurrency
Venezuela is in a financial crisis but its repressive government hasn’t blocked people from buying crypto and is issuing regulations and fees instead.
Paraguay bets big on Cryptocurrency
The Government of Paraguay completed talks with South Korea based Blockchain Technology Foundation to turn its cheap hydroelectric renewable energy into Bitcoin. The ambition of the partnership is to build the world’s largest cryptocurrency mining farm and then leverage the influence and command of digital assets to build the world’s biggest crypto exchange on top of it.
More Bitcoin ATMs than ever
Bitcoin ATMs are making it easier to buy Bitcoin than ever before. Chicago just got 30 new Bitcoin ATMs established taking the total number to 100 in the Windy city. Philadelphia also has about 100 Bitcoin ATMs at this point. World Wide there are more than 3.5k Bitcoin ATMs.
Lower Bitcoin Volatility
Many claim that Bitcoin is not “a real currency” because it’s price is too volatile to serve that function. But, it’s volatility rate (expressed as the average of the standard deviation of daily returns) has been decreasing and it is reaching a “new normal” as stated by Charles Bovaird at Forbes.
Major Retailers accepting Cryptocurrency Payments
Last August, Rakuten, “The Amazon of Japan”, announced that it had acquired a cryptocurrency exchange for $2.4 million. Recently in February 12, it stated in an announcement that its mobile app platform Rakuten Pay will be receiving a major update next month with the potential inclusion of crypto payments in conjuction with fiat.
Silicon Valley Business superstars remain enthusiastic about Bitcoin
Twitter and Square Cash app CEO and founder, Jack Dorsey has been intransigent Bitcoin pursuer all throughout 2018.
The co-founder of Paypal is a major Bitcoin bull and hodling. In 2018, Thiel’s Founder Fund bought an undisclosed amount (between USD $15 million and $20 million) of Bitcoin.
Vitalik Buterin, after receiving the Thiel Fellowship of $100,000 invented Ethereum, which is now the world’s second most valuable cryptocurrency.
After winning $65 million from their lawsuit with Facebook, the Winklevoss Brothers invested $11 million of their remuneration into Bitcoin (when 1 BTC was almost equal to USD $120) becoming Bitcoin billionaires. They are working closely with SEC to launch a Bitcoin exchange-traded fund in near future.
Market value of Ethereum, XRP and other major Altcoins showing marked increase
As history shows, the rise of one cryptocurrency generates interest and demand for other cryptos as well. The market value of EOS has grown 25% in market capitalization in just two days. Ethereum (ETC) and Ripple (XRP) have also grown by about 10% over the same period.
Still, the crypto market overall is very small compared to the amount of money flowing through the hallowed halls of institutional financiers.
The beginning of the 2019 Bitcoin Bull Run is far from certainty. Will it reach the highs of 2017 ? Let us know in the comments below.