Bitcoin has grown thousands of percentages over the last decade and is considered to be one of the best performing assets during this time. It topped out in it’s price in the winter of 2020 and that made the market go crazy for crypto and bitcoin specifically.
This demand persisted for another two years, until the summer of 2022, when the cryptocurrency market as a whole plummeted and Bitcoin hit all-time lows of $17,000 to $18,000 per coin. The currency reached stable conditions in 2023 and progressively increased to respectable levels of 23–24 thousand dollars. Even cryptocurrency is now accepted at casinos like SlotsLV for playing slots and table games.
The Main Reasons for the Growth of Bitcoin
Lately, Bitcoin has been exuding a positive self-image, and with good cause. The substantial increase in bitcoin values in 2020 was the result of a number of economic and societal causes. The two are really more closely connected than you may imagine, despite the fact that it may appear like a strange relationship.
Bitcoin was in a great position to see an increase in value as a result of the coincidence of these events. What main causes this rise, specifically? In-depth discussion of a couple of these themes will follow: the pandemic, substantial bitcoin investments, celebrity endorsements, and rising consumer interest. These factors collectively helped Bitcoin rise in popularity.
The Significance of the Pandemic in the Rise in the Value of Bitcoin
A pandemic starts in China in 2019 and progressively spreads to the rest of the world. In light of this, several issues are being faced by international industries and enterprises. The world had not seen pandemics in a very long time, so it was unprepared for such a turn of events. A specific crisis started to develop in the economy and stock markets against this backdrop. The oil industry was the first to react to the epidemic. It broke down.
The world did not expect such a development of events and was confused. Even the most daring and far-sighted financial experts could not have foreseen such an outcome. And this is where the media and the human factor come into play together.
In society, there is a misunderstanding of the political and economic situation, not to mention Covid. Statistics show that in recent years, the trust of the civilian population in the media has been falling sharply, but in acquaintances and colleagues, it is growing.
It works like this:
Mike is a typical individual who reads the news and makes an effort to remain current with current events. Nonetheless, he does not immediately become anxious when he learns about the stock market fall or other economic catastrophes. He usually asks his pal for a second viewpoint instead. Together, they go over all the information that is available and spend time analyzing it before choosing an action plan. By adopting this strategy, Mike keeps himself from making snap judgments that can endanger his financial security.
From the moment Mike found out about the news until he talked to a friend and made some decisions, a lot of time passed (maybe even a week). This is how stock markets work. They don't react to situations right now. From the moment of the event to the changes, a particular time passes because people also work there.
Against all that was happening, investors began to invest in risky assets. What prompted them to do so?
- Support from the side of world Central Banks.
- News from WHO that a vaccine is being actively developed and everything will end soon (a factor of hope for a brighter future).
And now, in November 2020, the British investment fund Ruffer invested 2.5% of its total assets in Bitcoin.
The next significant event was the Ripple scandal. The SEC (US Securities Commission) accused the platform of securities fraud. The cost of Ripple against this background falls by 40%. Where will investors go with their investments? Right. In stable and reliable Bitcoin.
Social Factors
Social factors in the growth of the value of cryptocurrency are no less important than economic ones. Significant investments from funds and prominent market players bring results, but the public also significantly contributes.
The rule “demand creates supply” is relevant in the cryptocurrency market. Do not forget that the number of BTC coins is limited, and the hype increases the value of those mined and present on the market. Thus, the excitement of consumers from different areas grew the value of desired investment assets.
People began to be interested in Bitcoin and began to see how quickly the value of Bitcoin and other coins grew. They saw cryptocurrency as a potentially profitable asset for short-term and long-term investments. Against this background, many companies and projects began to try to introduce cryptocurrency into their services.
• payment with cryptocurrency for purchases in online stores;
• payment by cryptocurrency for various services;
• use of cryptocurrency in games;
• development of the cryptocurrency market. This demand for BTC has encouraged people to step up and create their cryptocurrencies with unique features;
• even the gambling industry did not stand aside and allowed players to make deposits with cryptocurrency to play table games and slots. There are Many crypto casinos that accept cryptocurrencies as payment method.
Media personalities like Elon Musk supported people's trust. One of the most famous people in the world can influence the course of cryptocurrencies with one post on Twitter.
A good example was the situation with Amazon. When the company opened a vacancy to recruit specialists in blockchain systems, Bitcoin instantly rose in price.
A combination of factors played an essential role in developing BTC as the most expensive and popular cryptocurrency in 2020-2022. Despite price drops and market crashes, it remains the most costly digital asset.