Besides Freedom and Security, What Makes Bitcoin So Popular?
About one year ago, Bitcoin went through one of its worst sell-offs in history, with prices reaching as low as $3,800. One year later, Bitcoin had skyrocketed with over 1,200% to reach all-time highs well above $60,000, reaching a $1 trillion market cap in the process. In the ever-changing crypto space, NFTs (Non-Fungible Token) are making headlines as people started speculating about digital artwork. Cryptocurrencies and blockchain technology continue to innovate industries and see adoption in many different areas in and outside of tech.
Reasons Why the Price of Bitcoin is Increasing Lately
The reason why we see all-time highs again and again in 2021 is not because of Bitcoin’s superior security or its decentralized nature, giving people both privacy and security. It is again because of its popularity as a trading instrument. However, this time it is not mainly driven by the interest of retail traders, but rather that of financial institutions.
Banking juggernaut BNY Mellon says that digital assets are the future
BNY Mellon manages around $2 trillion in their asset management. They recently announced that they are going to hold Bitcoin and other cryptocurrencies on behalf of their clients. In what they call a first for the financial industry, BNY Mellon is developing a secure multi-asset digital custody and administration platform for both cryptocurrencies and fiat money. The initiative came following an increase in demand from clients seeking exposure to cryptocurrencies and the blockchain.
Elon Musk’s Tesla invests $1.5 billion in Bitcoin
Back in January, Tesla disclosed in a filing to the SEC, that they had bought $1.5 billion worth of Bitcoin. The reason behind the investment is that the American electric vehicle manufacturer will start accepting Bitcoin as a payment for their products. They want to offer more flexibility and maximize the return on their cash reserves. At the end of last year, Musk had already hinted that Tesla might be adding Bitcoin to their balance sheets in the near future.
Visa adds Bitcoin and blockchain to their roadmap
Visa used to be a prominent enemy of Bitcoin and the crypto space as a whole. However, as time progress and cryptocurrencies are seeing mainstream adoption, the wind has changed. Instead of fighting the transition to digital assets, Visa has instead turned into one of Bitcoin’s biggest cheerleaders. They are already partners of 30+ cryptocurrencies and plan to launch a Visa crypto software program later this year. The aim is to make cryptos more accessible to their existing bank clients.
It remains unknown where the price of Bitcoin is headed in 2021. At the time of writing, the price has again dropped below $60,000. What is for sure is that the price of Bitcoin won’t stabilize any time soon. Another certainty is that cryptocurrencies and the blockchain space will continue to see adoption in areas of our lives where the technology can improve our ways of doing things online.