About six years ago, one bitcoin cost around $580 (equivalent to approx. 40,000) in August 2016. Not only that, it was selling for around $11,200 (approx.) 8,17,000) increased to over $37,600 in August 2020 (approx. 28 lakh) in August 2021, registering a massive growth of around 236 per cent in just 12 months.
Now, in September 2022, it has now dropped to $20,210, marking a notable decline of 46 percent in a little over a year.
Investors often wonder why the price of bitcoin fluctuates so rapidly. The unpredictability in price makes it seem “unreliable” as an investment among a section of investors. But to understand why its price changes so rapidly, we need to know the reasons that drive this cryptocurrency and – importantly – its demand.
Read more: Crypto to NFTs: Are These New Investment Opportunities Worth Considering Right Now?
because of the spike
One of the major reasons for the huge jump in its price is that established institutions like pension funds, investment trusts are now investing in it. As of 2017, bitcoin was invested by individual investors. But with greater acceptance, many billionaire investors and financial institutions have now come out openly in favor of bitcoin and its future. For example, JP Morgan began offering bitcoin funds to its wealthy customers, and also created JPM Coin, a digital coin for payments using blockchain technology.
musk effect
When Elon Musk-led electric car maker Tesla bought $1.5 billion worth of bitcoins in February 2021, the price of bitcoin reached an all-time high of $44,000 (approximately). 33 lakhs). Later, Musk dragged his feet for allowing Tesla to accept payments in bitcoin by expressing environmental concerns that bitcoin mining uses large amounts of electricity. However, he announced again in July 2021 that Tesla could accept payments for Tesla in bitcoin, which would cause the bitcoin price to rise again.
Read More: Here’s How to Trade the Bearish Flag Pattern in Crypto
more acceptance
Vendors and merchants have also started accepting bitcoin. Paypal, Starbucks, BMW, Expedia and Zinga, among many others, now offer the convenience of transacting in bitcoin. Any positive statement from central banks in favor of blockchain technology is likely to tip bitcoin in a big way.
El Salvador became the first country in June to accept bitcoin as legal tender from September 2021. In fact, hardly any institution or country is against blockchain – the technology behind the creation of bitcoin.
Therefore, bitcoin price recently hit new all-time highs. Some have invested in it for fear of missing out, while some are still uncertain about its future. Whatever be the side, it is advised to exercise caution before depositing large sums of money in it.
obey mintjini For more such stories.
catch all business News, market news, today’s fresh news events and breaking news Updates on Live Mint. download mint news app To get daily market updates.