According to Reuters, Bitcoin jumped to its highest in over a year on Monday, adding to a 2020 rally that has seen it more than treble in price since March.

The biggest cryptocurrency gained 4.4% to $12,424, its highest since July 2019. Bitcoin has soared over 70% this year, making it one of the strongest performing assets.

Plummeting interest rates and huge bond-buying programmes by central banks across the world have boosted demand for the cryptocurrency, seen by some investors as a hedge against inflation due to its capped supply.

There is really not much overhead resistance above 12k #bitcoin. Next up is 13.8K, peak of previous high, then ATH

— Coincident Capital (@CoincidentCap) August 17, 2020

Analysts as quoted in a Forbes article, believe that Bitcoin is currently in a bull season and they believe the cryptocurrency is set for even more gains in the near future.

Mike Novogratz, CEO of Galaxy Digital, was cited in a recent  CNBC article that the liquidity injections by the world’s central banks are driving interest and investment in Bitcoin and gold. He believes that there is a likelihood that BTC trades above $14,000 in a few months, and perhaps even $20,000 by the end of the year. He goes on to say in another interview, that it may even outperform gold.

Just to put things in perspective, the market cap for Bitcoin is now hovering around the $226 billion mark. For comparison, Bank of America’s market cap is now at $224 billion. According to AssetDash data, this ranks Bitcoin as the 25th most valuable asset by market capitalization.

There is also analytics from Onchain that shows the number of bitcoin being held on Ethereum’s blockchain network has been multiplying at an extremely fast rate since the end of May. According to Bitcoin.com, there is approximately 38,021 BTC on Ethereum or around $449 million stored in synthetic bitcoin protocols like Wbtc, Renbtc, Sbtc and many more.

Most recently, MicroStrategy purchased 21,454 bitcoins at an aggregate purchase price of $250 million. According to the release from BusinessWire, by acquiring 21,454 bitcoins, MicroStrategy addressed the other prong of its capital allocation strategy, which called for investing up to $250 million in one or more alternative investments or assets.

“Our investment in Bitcoin is part of our new capital allocation strategy, which seeks to maximize long-term value for our shareholders,” said Michael J. Saylor, CEO, MicroStrategy Incorporated. “This investment reflects our belief that Bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash. Since its inception over a decade ago, Bitcoin has emerged as a significant addition to the global financial system, with characteristics that are useful to both individuals and institutions. MicroStrategy has recognized Bitcoin as a legitimate investment asset that can be superior to cash and accordingly has made Bitcoin the principal holding in its treasury reserve strategy.”

Mr. Saylor continued, “MicroStrategy spent months deliberating to determine our capital allocation strategy. Our decision to invest in Bitcoin at this time was driven in part by a confluence of macro factors affecting the economic and business landscape that we believe is creating long-term risks for our corporate treasury program ― risks that should be addressed proactively. Those macro factors include, among other things, the economic and public health crisis precipitated by COVID-19, unprecedented government financial stimulus measures including quantitative easing adopted around the world, and global political and economic uncertainty. We believe that, together, these and other factors may well have a significant depreciating effect on the long-term real value of fiat currencies and many other conventional asset types, including many of the assets traditionally held as part of corporate treasury operations.”

Sources : Reuters, Forbes, CNBC, Bloomberg, AssetDash & Business Wire

Follow Asia Blockchain Review on:

• Telegram: https://t.me/asiablockchainreview
• Facebook: https://www.facebook.com/pg/asiablockchainreview
• Twitter: https://twitter.com/abr_blockchain
• LinkedIn: https://www.linkedin.com/company/asia-blockchain-review/
• Website: https://www.asiablockchainreview.com/
• Email: [email protected]
• Youtube: https://www.youtube.com/channel/UCMQ5CVu0c9-pMlwB8LUvkiA

About the author

Anil Prabha

Editor In Chief

Anil started his career in journalism all the way back in 2003. After traversing the sphere of editorial, corporate communications and advertising, he has now come full circle and is back in the world of journalism. He believes in the power of the written word, and its ability to enthrall, delight and inform the reader.