At the time of writing, Bitcoin had reached a new high of $ 20,000 USD per bitcoin. What has changed since you last reached this height?
Covid is crazy
The Covid-19 situation has changed the way people do things. Technology has been pioneered in daily life. Things that used to be done physically are now being pushed into the virtual world – schooling, eating out, entertainment, work and purchasing many products and services. Cryptocurrency is being used to fit such an agenda. Why? They are an extension of the technically driven world. They can also be used to compete with existing financial systems at the lowest possible cost.
Acceptability
Last time Bitcoin reached its record high, with many organizations demonizing cryptocurrencies as a form of payment used by criminals for terrorism, money laundering and illicit drug trafficking. At the moment, MasterCard and Visa are linking cryptocurrencies to their credit cards, and PayPal is now accepting Bitcoin for use on its platform. Many governments are talking about issuing cryptocurrency versions of their traditional currencies. There was also pressure from Facebook to partner with major banks and other institutions to issue a cryptocurrency called Libra, which did not go far enough but the purpose remained. Cryptocurrency is no longer for criminals unless the aforementioned institutions commit crimes.
Adoption
The key to any technology is widespread adoption. The more people use something, the more demand there will be for its use and the more important it will become. With widespread adoption, systems that work together with products also begin to change. Examples include Apple iPod, Microsoft Windows, Internet providers, and electric cars. With the new demand will come new industries and piggy back products which were not very effective without taking the original product.
Weaknesses of traditional investment
Due to the cowardly situation and depression, investing in stocks and bonds is becoming more expensive and the underlying economy carries high risk due to disconnection from the functioning of these markets. High debt levels make real estate investments more risky than in the past, as well as the instability of rental income and the ability of people to pay for their mortgages. Cash is a safe haven but rising debt and the potential for inflation mean cash is also at risk. The notion of diversity means that these investments should be kept to a certain extent, but now there is a desire for an asset that complements these products. This new asset is cryptocurrency. This product allows for diversification from excessive debt, currency depreciation and high inflation.