Over the past six months, the world of traditional financial instruments faced real competition from cryptocurrency. If before that, Bitcoin was considered as an asset primarily for retail investors, in the second half of 2020 institutional investors began to be actively inhibited into Bitcoin.
Put the horse ahead of the cart: Investors affect the cost of Bitcoin, and not the opposite
Investor activity pushes the price of the main cryptocurrency up, and the growth of cryptocurrency prices is attracted by a new inflow of funds. In August 2020 MicroStrategy, the largest independent traded on the NASDAQ company on business analyst, announced the purchase of bitcoins by $ 250 million as the main asset of the reserve. This gave a positive impetus to the crypton, whose participants are tired of the protracted correction. After Paypal's payment system reported in October about the plans to implement the support of Bitcoins in 2021, the Bitcoin course was not stopped.
By the end of 2020, Bitcoin first updated the historical maximum achieved in December 2017, and next began to take new frontiers. In 2021, growth accelerated: $ 30,000, then $ 40,000, then $ 50,000, and even this line was not for cryptocurrency limit. Each week in the new year brings optimistic messages to the cryprotes: here Tesla invests $ 1.5 billion in the first cryptocurrency, and its founder Ilon Mask, loves to the public and the richest man in the world, calls himself a supporter of Bitcoin. How was it not to succumb to the general optimism reigning on the market, and not to invest the last free money in cryptocurrency?
Dynamics of price bitcoinAnd suddenly, when Bitcoin appeared close to $ 60,000, Ilon Mask spoke with a stunning statement.
Bitcoin immediately responded with a powerful correction that covered the rest of the cryptocurrency. And the Investment Director of Barclays Wealth & Investments Will Hobbs in an interview with Business Insider called enthusiasm relative to Bitcoin "Sectant", which relies on "magic thinking." Does this mean that the growth of Bitcoin is the result of only Hypa, which market players skillfully took advantage?
Who does not risk, he does not drink champagne
Cryptocurrencies are a high-profile asset, and even the most unfounded bitcoin enthusiasts do not argue with this. While coin volatility significantly exceeds the most risky assets classes, such as stock companies of developing countries. But the past year mixed all the cards, and the appearance of convenient user interfaces for investment changed the placement of forces in the market.Retail investors flowed on the stock market. Pandemic, loss of income, helicopter money, which distributed in many countries as support of households - all this provoked the arrival of newcomers to the market. Their investment solutions are difficult to be called thoughtful and weighted, but at the expense of the March collapse, they managed to acquire the assets of cheaper, and to sell - with profit.
When it was still possible to invest in the shares not within the IPO and get profitability in less than a year at 50% -80%? In 2020, anyone who just came to the market could earn money. And one successful retail investor led ten more.
Haip or not Haip: That's what is the question
It's time to admit - now all Haip. The social network did their job. Everything that falls into public space and attracts the attention of the public becomes a high-degree intensity. It's time to stop counting Haip only with deception and fraud, Haip is just a hot topic that concerns the society as a whole or separate communities.
If you look at the growth of Bitcoin's course from this angle, it becomes a preparing this growth.
First, market participants, both retailers and institutional, hungry on new investment tools. Not derived to derivatives in the tenth degree, and something more close and clear, but at the same time a new and not similar to other assets, which makes it possible to increase the diversification of investmentportfleels and increase the risk hedging effect.
Secondly, retail investors with small investments are tired of low yield, the effect of which is visible only on volume investment.
Thirdly, the global tendency to destroy traditional paradigms of relationships in society has reached the financial, extremely conservative market. He will resist, leaving, accelerating and shouting that all this is Haip and bubble, but sooner or later accepts the redistribution of forces. It will take all stages from denial and anger before adoption.
The most far-sighted institutional investors prefer to go to the fifth, final, stage are now. Others are just starting their way, entering into the first stage of denial. But they will get to the adoption stage.
Now the market will have the most difficult step: stop covering eyes to obvious things and recognize that the financial world has changed and will never be the same.
The POST Investment Institutionals in Bitcoin is a HYPE or the search for new hedging assets? Appeared First On Beincrypto.