In 2017, when Bitcoin rose from $1,000 to $20,000, it was very much predicated on interest from the retail investor in Bitcoin. The coin was still new and largely not known about, but its price rise caught the attention of mainstream media and introduced many new investors in.
These new retail investors were very much speculative buyers of Bitcoin, hoping to ride the rollercoaster to mass profit with very little time or effort. For some, that is what was achieved as Bitcoin managed to skyrocket in a few weeks towards the end of 2017.
However, many of these speculators were burnt and as Bitcoin’s price collapsed after nearly touching $20,000. This largely scared off the pure speculative retail investor — and they have not had much of an impact since.
A new rally
The latest rally that not only took Bitcoin to $20,000 — but to $30,000 and as high as $34,000 as it stands, has been heavily based on a new interest from a new — more powerful — group of investors. The institutional kind.
Institutional investors have long been courted by Bitcoin with the community trying to prove that it is a much better investment than anything currently available. And, this year, with Covid-19 impacting the markets, it was Bitcoin and its overall positive growth through the darkest times that swayed a lot of minds.
The new investors driving Bitcoin’s rally are not everyday people, and the world has seen that as some major companies have either thrown their weight behind Bitcoin — such as PayPal — or have invested in the coin for their company. This is MicroStrategy’s approach.
MicroStrategy CEO Michael Saylor decided to make Bitcoin the company’s primary treasury reserve asset, taking up $425 million worth of Bitcoin. That investment is worth $1.56 billion at the time of publishing. On December 4, Saylor bought even more.
A new world
Bitcoin has always seemingly been a little ahead of its time — especially when it was created nearly 12 years ago. The recent years have seen the population in general catch up and start to appreciate how this digital coin can play a role in a rapidly digitizing planet.
Digital payments were always the way the world was moving, but Bitcoin’s part to play has been amplified now as Covid-19 has shown that the way we did things, the old norm, is no longer suitable.