The cryptocurrency market last week witnessed a landmark moment as bitcoin, the dominant cryptocurrency broke the 2017 bull run and recorded a historic high of $34,800. Recalling 2020 as an exceptional year, the digital asset exceeded most expectations compared to large assets categories and registered over 300 percent annual gain.
Although speculative trading and initial coin offering mostly propelled the price surge of bitcoin in 2017, the cryptocurrency market was quite robust in 2020. Many factors played a significant role in influencing the uptrend of the digital asset and have been discussed here below.
Huge Institutional investments in Bitcoin
In the year 2017, many outstanding institutions were considerably wary of the digital coins and became decisive about their economic potential. For example, Jamie Dimon, the CEO of JPMorgan Chase constantly chided the cryptocurrency and adversely affected its value.
Ever since significant changes have been witnessed in leading institutional investors as prominent figures began questing for bitcoin and the cryptocurrency market. Major institutions such as Microstrategy in July last year revealed it was investing $250 million in the digital coin. Still, in December, the company invested an additional $50 million in the digital asset.
This pattern though it’s quite different as in 2017 is likely to accelerate and it demonstrates the rising global adoption of the digital asset as an option for the inflationary fiat currencies.
Wall street’s Giants Joined the Cryptocurrency Race
Although major Wall Street figures took a decisive role in 2017, a change of tune has been heard for the same wary individuals who have joined the cryptocurrency race and are initiating crypto trading services.
One of the Wall Street giant Fidelity investments was the novel to join the cryptocurrency race. The investment firm started by establishing the Fidelity Digital Asset, a digital branch and in 2018, the firm set up crypto custody services. To address the expanding demand for the digital asset, the firm in August last year set up the Fidelity Digital funds which are mainly controlled by the Fidelity Digital asset. Moreover, many other firms such as Fintech arm, and standard chartered have entered a partnership with Northern Trust to establish the crypto custody solutions for their respective customers.
According to Ong at CoinGecko, this move by Wall Street giants to join the cryptocurrency race and the setting up of crypto trading services is quite likely to accelerate in the coming years.
Bitcoin Acceptance in Retail enterprises
Acceptance of Bitcoin in retail enterprises got a significant uplift after Paypal made a major announcement to back bitcoin and other digital assets. Excellent news for American customers as they can access easily the crypto offering, a payment process giant, and also in 2021, the firm has signaled to expand the services to Venmo.
However, in 2017, some companies such as the digital bank Revolt based in the UK made moves to increase retail acceptance of the digital coin by setting up cryptocurrency services to facilitate investors trade various cryptocurrencies such Bitcoin, Ethereum, and Litecoin.
Following the recent move by Paypal to join the cryptocurrency race, large scale acceptance of bitcoin is expected to rise since the company has a large user base globally.
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