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In the morning of May 12, Bitcoin broke through $7,400, the highest reached 7410, and the year-on-year increase reached 97%, nearly doubled.
The total market value of the digital currency market exceeded $210 billion, of which Bitcoin accounted for 58.7%.
The following are the six reasons for the skyrocketing bitcoin:
1. Overseas Fund Boost
As of the date of publication, the 24-hour BTC net inflow of funds reached 4.1 billion yuan, of which, the USD inflow was nearly 5.1 billion US dollars. The main reason for this increase in funds is from USD, mostly foreign funds.
2. Safe-Haven Assets
The global market turmoil, the demand for safe-haven funds will rise rapidly. Compared with mainstream safe-haven assets, decentralized virtual currency assets represented by Bitcoin will inevitably receive high attention from global capital. According to CoinDance data, the trading volume of off-site bitcoin in Pakistan, Venezuela, Iran, and other countries on the point-to-point trading platform LocalBitcoins on May 5th soared, of which Iran’s trading volume soared to 25.3 billion.
3. Expected Production Cuts
Historical data shows that there is a clear correlation between the halving of BTC production and the price, and both production cuts are accompanied by an increase in bitcoin prices. To this end, the halving of bitcoin production that occurred around May 2020 is also a key factor in the start-up price cycle, which may be the early hype of halving production.
4. Institutional Growth
The reason for the rise in BTC may be attributed to the entry of institutional investors. Most institutional investors entering the market have made it clear that Bitcoin may be as high as $50,000 in the near future. In 2019, major players such as Etrade, TD Ameritrade and Fidelity all wanted to enter the encryption field and possibly provide BTC in the coming months. Large investment institutions such as the Intercontinental Exchange (ICE) and Fidelity are also increasingly interested in bitcoin transactions.
5. Consensus Conference
Recently, with the market’s transformation of bears and the overall environment of BTC’s continuous high in the year, it can be expected that the forthcoming consensus conference will announce new developments and promote market sentiment as a booster for bitcoin prices.
6, Digital Gold
As a digital gold, BTC carefully observed that its trend in the past year was very similar to the price trend of gold in the late 20th century. BTC may repeat the overall trend of gold. Billionaire Mike Novogratz even said that the market value of Bitcoin will easily exceed gold in the next 20 years.
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