The past year has seen a 21st century gold rush, and speculators have been falling over themselves for a piece of the action. The discovery of gold always brings a world in its wake and bitcoin – a virtual currency “mined” using a computer – is no exception. In recent years Bitcoin’s price has seemed to continue marching higher. But what is driving this growth? It turns out there are a wide variety of factors that continue to make Bitcoin rise in value.

Bitcoin Rush

An analogy made easier by Bitcoin’s other similarities to the precious metal. It’s hard to say whether this excitement is warranted, but it’s equally hard to deny Bitcoin’s increasing relevance to businesses and the broader economy.

Bitcoin, along with other cryptocurrencies, may have implications not only for the technology industry, where much of the current action is concentrated, but also other industries from retail businesses to financial services.

Previous Resistance of Bitcoin

In October, Bitcoin retested this resistance point only to fall back down. On November 4th, Bitcoin pushed straight through $14,000 and continued higher. And its reached 65,000$ on 1^st April 2021. After it has been on the selloff mood and now it has been reached half more value of the last high and now it is trading at around 40,750$ on 28^th July 2021.

Many investors have become bullish that the cryptocurrency will be able to retest that price point or even push past it. This speculation has lead to an increase in Bitcoin’s value.

The reason for rushing towards Safe-Haven Assets

To hedge against this rising inflation, many have retreated from the dollar and have taken shelter in assets that historically have held value or have even appreciated in value. Typically, assets that people convert their dollars into to avoid inflation or volatile markets are ones that are scarce or are less volatile in general. These ‘safe-haven’ assets include things like precious metals, stocks in sectors that are generally less volatile, and more recently, Bitcoin.

Adoption as a Means of Payment

Aside from PayPal, this has further implications. PayPal also owns the widely popular payment app, Venmo. Venmo has more than 40 million active accounts, making the accessibility to Bitcoin and other cryptocurrencies even more significant. While PayPal and Venmo are newer to crypto, there are a host of other applications that allow its users to buy, sell, and hold. Popular competitors to PayPal and Venmo, Square (SQ) and CashApp, also accept cryptocurrencies making the audience to Bitcoin even wider.

Rising Cost of Production

Conclusion

However Bitcoin is considered by professionals to be the new and new standard financial unit of the future. Many central banks have actually announced plans for bank-backed digital units, but Bitcoin is highly skeptical due to its shady nature. In recent times One bitcoin was currently worth five times more than a year earlier, while the combined value of all units in global circulation is almost $1.0 trillion.  Most central banks already acknowledge this. They’re just finding the right modality to allow for this new technology to be able to mainstream itself without creating negative consequences. Crypto is an ecosystem. It’s noisy and volatile. Having said this, volatility is not new. People who are active here understand full well the kind of risks that they’re taking on. You have the whole evolution of non-fungible tokens, or NFTs, as well as blockchain’s ability to redefine processes and flows. Because there are so many moving parts, there isn’t clarity around how this will evolve, which is resulting in diluted investor appetite.