Yesterday, the price of Bitcoin broke through $16,000 for the first time in three years, and it is still rising at a very obvious rate as of today. According to the official market data of ZB.com, Bitcoin is currently reported at $16,442, a 24-hour increase of 5.29%, and the current price is also the highest price in 24 hours. Bitcoin rose by 123% during the year, and this quarter is up nearly 50%.
With the end of the U.S. election, it is expected that the stance of President-elect Joe Biden may have an impact on fiscal policy in the next four years, which in turn will affect inflation, and Bitcoin is currently widely regarded as a hedge against inflation. Kyle Davies, co-founder of hree Arrows Capital, said: “In the context of the Federal Reserve’s stimulus measures, we expect investors to continue to allocate Bitcoin after this.” He also added, “So far, interest in Bitcoin has mainly come from institutions. When Bitcoin breaks through the all-time high of $20,000, we may see more retail participation.” And Bitcoin has recently been recognized by many listed companies and famous investors as a store of value tool. And also because of the increase in institutional participation, it is facing a supply contraction.
US billionaire investor Stanley Druckenmiller disclosed his Bitcoin position on Monday and said that in the long run, Bitcoin will outperform gold.
Recently, Michael Saylor, CEO of MicroStrategy, a Nasdaq-listed company, also explained why MicroStrategy chose Bitcoin as their asset reserve. Saylor said that due to economic stimulus measures that have caused the US money supply to inflate too fast, the purchasing power of cash is rapidly declining. In order to avoid “the company’s $500 million in cash being swallowed by the government,” MicroStrategy chose Bitcoin as a new value store tool. He pointed out that in the past ten years or so, the M2 money supply (including physical cash, checking and savings accounts, etc.) has increased by 5.5%; after the COVID-19 outbreak, economic stimulus measures have increased M2 by 20%. As the money supply expands, their purchasing power will gradually decline. Therefore, MicroStrategy began to find new value storage tools in real estate, bonds, stocks, precious metals, derivatives and cryptocurrencies.
For gold, the most traditional storage value tool, Saylor believes that gold is not scarce. Because gold mines can still be produced in large quantities, gold mines are the enemy of gold holders, and gold prospectors are destroying the value of gold. He also predicted that as investors turn to Bitcoin, gold is at risk of being sold. As for technology stocks favored by many investors, Saylor believes that in the long run, stocks cannot be a good store of value unless the stock’s price rises faster than the rate of currency expansion. Only monopolistic companies can support this rate of price increase, but politicians will not allow these companies to exercise this power indefinitely. So Saylor said, “In the end, we have to find something that cannot be produced more. This kind of thing essentially needs to be unrelated to fiat currency, and the only thing I can find now is Bitcoin.”
More and more institutions hold the same view as Saylor, so market researchers at ZB.com believe that the price of Bitcoin may consolidate in a short period of time, and then approach $20,000 in December.
About ZB Group
ZB Group was founded in 2012 with the goal of providing leadership to the blockchain development space and today manages a network that includes digital assets exchanges, wallets, capital ventures, research institutes, and media. The Group’s flagship platform is ZB.com, the industry leading digital asset exchange. The platform launched in early 2013 and boasts one of the world’s largest trading communities.
ZB Group also includes ZBG the innovative crypto trading platform, and BW.com, the world’s first mining-pool based exchange. Other holdings include wallet leader BitBank, as well as exchange brands ZBM, ZBX and Korea’s Bithi.
Industry intelligence and standards are headed by the recently launched ZB Nexus who embody the core values of ZB Group and open-source their reports and analysis for the public.
Learn more about ZB Group by visiting www.zb.com.