Data from Grayscale Investments‘ annual survey shows that the coronavirus pandemic played an important role in the decision of new investors in Bitcoin.
As the price of Bitcoin rises to $18,000 and traders try to secure a new all-time high, the number of institutional investors jumping on the Bitcoin bandwagon (BTC) continues to grow.
Grayscale now has over 500,000 Bitcoins
This time around, institutional and retail investors are interested in buying Bitcoin Code, and data from the cryptomoney derivatives markets shows that institutional investors are pushing Bitcoin volumes to new highs.
Bitcoin Futures volumes by exchange.
According to research from Grayscale Investments, a digital asset management company that currently has more than $9.8 billion in assets under management, the coronavirus pandemic may be the major factor behind the current Bitcoin surge.
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According to the company’s annual survey, 83% of all Bitcoin investors began buying in the last 12 months, a time when COVID-19 cases were minimal.
Thirty-eight percent of all current Bitcoin investors joined in the last four months, and among them, 63% say that the economic disruption caused by COVID-19 positively influenced their decision to buy BTC.
Bitcoin is becoming more conventional
Grayscale’s survey also shows that Bitcoin is becoming more conventional among the general public and investor class. The outlook among those who haven’t yet invested in Bitcoin has changed dramatically since mid-2019. In 2020, 55 percent of investors interviewed expressed interest in buying Bitcoin, a substantial increase from 36 percent in 2019.
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Almost half of the respondents believe that cryptomonies will be considered a conventional means of value exchange by the end of the decade.
The current trend is likely to increase with investors being drawn to Bitcoin’s history as a store of value, and it’s possible that mass adoption will come sooner than most experts and investors expect. A little evidence of this comes from a recent Citibank report, in which the author estimates that the price of Bitcoin may reach $318,000 by December 2021.
Will Bitcoin cease to be the center of attention once the COVID-19 disappears?
The question of how Bitcoin’s price will react to the eradication of COVID-19 is a question that reverberates in the minds of some investors. According to Jonathan Hobbs, author of The Crypto Portfolio and former manager of digital asset funds, the effects of the pandemic will be felt even long after the disease is brought under control. Hobbs told Cointelegraph:
„Covid-19 was the match that lit the flame of institutional adoption. But the wood was building up long before that. Now that the fire is burning, it will take a lot of water to extinguish it. When the world is finally free of Covid-19, the economy will still be sick with debt. And the central banks will continue to print money to try to inflate those debts, as they have done since the financial crisis of 2008. This means that the institutional story that Bitcoin is a haven from inflation is likely to continue long after the pandemic is over.
Clearly, the enormous economic stimulus and growing monetary policy as a result of the negative impacts of the coronavirus have changed the economic landscape in the near future.
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While some analysts may overestimate how the coronavirus pandemic influenced the Bitcoin spike in 2020, it clearly played a role in accelerating investor interest in cryptomonics.
One of the main positive aspects identified by investors is Bitcoin’s low barrier to entry and its ability to gain value when there’s volatility in traditional markets. These factors are likely to remain, even when the pandemic is over.