By the end of 2020, the bitcoin rally seems to have been triggered by an unprecedented wave of demand from institutions and billionaires. The trend was set after MicroStrategy, the world’s largest publicly traded business intelligence company, announced on 11. August announced it would convert $250 million of its Treasury bonds into BTC.
Daily chartBTC/USDT. Source: TradingView
By the end of January 2021, MicroStrategy had invested $1.095 billion to amass 71,079 BTC, or 0.38% of bitcoin’s revenue. In early February, the company held a free webinar on strategies to integrate bitcoin into the company’s fund, and MicroStrategy is in the process of raising an additional $900 million to buy even more BTC.
Institutional asset manager Grayscale also aggressively built bitcoin accumulations in 2020, with its Bitcoin Trust reporting an 872% increase in assets under management from $1.8 billion at the start of the year to $17.5 billion in early January. So far, Grayscale has acquired bitcoins at a price higher than the creation of new BTC.
The eighth. The announcement in February that Tesla CEO Elon Musk had invested $1.5 billion, or 7.7 percent of the electric car maker’s coffers, in BTC sent the price of bitcoin to new highs above $43,000.
And the positive institutional news just keeps on coming, with rumors that Twitter could be the next big company to put bitcoin on its balance sheet, and mega banks like BNY Mellon and Deutsche Bank announcing plans to start serving bitcoin. Large funds such as BlackRock and Morgan Stanley are questioning whether an investment in bitcoin is sound.
The $1 trillion milestone follows 12 months of extreme volatility for bitcoin, with BTC’s capitalization increasing more than tenfold since the Black Thursday crash in March 2020.
Faced with the growing threat of a coronavirus pandemic, former U.S. President Donald Trump declared a ban on entry from Europe to the United States on March 11. after which many countries around the world imposed a full blockade.
The growing panic caused chaos in the cryptocurrency and older financial markets when the price of bitcoin fell more than 50 percent on March 11. and on March 13. March was below $4,000, resulting in strong liquidity on leveraged trades. On the 13th. In March, bitcoin’s market capitalization fell below $100 billion for the first time since May 2019.
Black Thursday Bitcoin Prices. Source: TradingView
Despite this carnage, opportunistic buyers have steadily driven up prices in anticipation of the halving of the reward for a third block of bitcoins in May 2020. In May, BTC briefly returned to $10,000 after it was revealed that famed billionaire hedge fund manager Paul Tudor Jones had invested in BTC to hedge against inflation.
While the DeFi bull market in Q3 2020 and excitement over the Ethereum Eth.2 redesign took attention away from BTC, many of the gains from the DeFi boom quickly found their way into Bitcoin – by the end of October, BTC was over $12,000. It tested its records from 2017 to late November, after PayPal launched a cryptocurrency exchange service in the United States.
With the increase in supply since 2017, bitcoin is at 18. November set a new record for market capitalization. BTC’s capitalization has exceeded $326.5 billion for the first time and the price has climbed above $18,000.
Since then, bitcoin’s market capitalization has more than tripled in about three months, and BTC reached new record prices in December, rallying higher.
It took just 12 years for bitcoin to grow from an obscure academic mumbo-jumbo into a $1 trillion decentralized network and become the eighth largest trading asset with a thirteen-figure market capitalization.
Microsoft, on the other hand, took 45 years to surpass $1 trillion in capitalization. Amazon took 27 years and Google reached the $1 trillion mark in just 22 years.
The question now is how long it will take for bitcoin to reach the market capitalization of gold.
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