Bitcoin and other cryptocurrencies are gaining more traction in 2021 as big names like MasterCard and PayPal are supporting Bitcoin. The crypto market is experiencing a boom of new investors, both institutional and retail, while the price of Bitcoin is still on a bull run. In case you are looking to invest in BTC, in this article, we have provided a brief overview of the Bitcoin market in 2020 and 2021.
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Bitcoin Halving and Bull Market Phase
One of the most important events in the crypto community is Bitcoin halving which was anticipated to happen in May 2020. Bitcoin halving is an event that is set to happen after 210,000 blocks mined, or it roughly occurs every four years. On May 11, 2020, the block reward of the miners was cut in half and went from 12.5 BTC to 6.25 BTC. This event is meant to cut the inflation rate in half, and it also controls the supply of BTC as there is not an external authority that regulates the available supply of BTC.
As the miners are responsible for the validation of new blocks of the transaction and the introduction of new BTC in the network, they will be less motivated to mine with each having diminishes their main block reward. So, the relationship between the supply and demand shifted. And, because the supply was growing at a slower pace than demand, the price of Bitcoin started to rise.
It reached a price of $9,500 in May, and afterward, it followed an upward trend. Some important moments include a high price of $13,646.02 in October, a record-breaking price of $19,157.16 in November, and it exceeded $20,000 by December. Actually, during 2020 the price of the cryptocurrency has risen by about 170%.
New Retail and Institutional Investors
Consequently, the number of retail investors and also institutional investors were rising, and they were adding Bitcoin to their portfolios. Today it’s quite easy to start investing in Bitcoin because there are a variety of online trading sites.
One good example is Bitcoin Fortress, which is an AI-driven trading system that can produce up to 10-time better results than manual trading. Moreover, because this is an automated trading site, it is not required for you to have extensive knowledge and experience in crypto trading.
Some notable investors include brands like Tesla, PayPal, Square, and there are also a rising number of businesses and organizations that accept BTC payments, such as UNICEF, Microsoft, OK Cupid, and a lot of other smaller brands.
Market Capitalization
Another advantage of the bull cycle was an increased market capitalization of Bitcoin. Otherwise, it’s also worth mentioning that Bitcoin is one of the best performing cryptocurrencies in the last ten years, and it is also the largest cryptocurrency based on its market capitalization. The market capitalization during the bull cycle has gone from $600 million to $1 trillion.
Another reason that drives the investments in Bitcoin is that it’s a very rare digital cryptocurrency. In comparison, other cryptocurrencies have a higher available supply. For example, the current supply of Ethereum is 115.01 million. On the other hand, Satoshi Nakamoto has restricted the supply of Bitcoin to a total number of 21 million BTC. So, investors are looking to obtain BTC because it is very rare and 18 million have already been mined. This is one of the reasons why it is dubbed as a safe haven asset.
