Bitcoin Surges Again: Big Money Drives Rally Above $20,000
– The beginning of 2023 has seen Bitcoin regain some of its old fervour and pull itself up above the $20,000 mark, despite a less-than-rosy marketplace.
– The question is why? Supply and demand theories don’t really apply to Bitcoin, and few people are running out and buying them.
– The answer seems to be Big Money; large financial institutions and insurance companies who have billions to invest, and who control the money markets.
The beginning of 2023 has seen Bitcoin make a resurgence, with the digital currency rallying from its November 2020 low of around $17,000 to above $20,000. Despite the less-than-rosy marketplace, with exchange crashes, fraud and stories of corruption, Bitcoin is once again making headlines. But why?
The question of why Bitcoin has seen such a resurgence is not easily answered. The theory of supply and demand, which is often used to explain the fluctuations in prices of everyday items such as bananas, petrol and house prices, does not really apply to Bitcoin. This is because, although the total number of Bitcoin is limited and there is an ever-decreasing rate of supply, it is still a long way off the magical 21 million mark. Furthermore, few people are running out and buying Bitcoins right now, as they have been lacklustre for quite some time and showing few signs of going anywhere near their high of November 2020.
So, if supply and demand does not explain Bitcoin’s rise, what does? The answer seems to be Big Money. Large financial institutions, banks, insurance companies and pension funds have billions upon billions to invest, and control the money markets. These powerful players are increasingly turning to Bitcoin as an alternative to traditional investments, such as stocks and bonds, which are no longer offering the returns they once did.
Furthermore, Bitcoin’s safe haven characteristic – the ‘digital gold’ – as it once was called, is beginning to become more appealing as a recession looms and inflation and high interest rates mean we all have less disposable income than we did this time last year.
In conclusion, it seems that the Bitcoin resurgence comes down to Big Money. Large financial institutions and banks are turning to Bitcoin as an alternative to traditional investments, due to its safe-haven characteristic and growing appeal. As these powerful players continue to invest in Bitcoin, the digital currency has seen a resurgence, with prices back above the $20,000 mark.