• Bitcoin has seen a resurgence in early 2023, crossing above the $20,000 mark for the first time since early November.
• The cause of the resurgence is unclear, as the marketplace is no more rosy now than it was then, with exchange crashes and stories of fraud aplenty.
• The surge in Bitcoin may be due to “Big Money”, or banks, financial institutions, insurance companies, and pension funds, who have billions to invest and control the money markets.
The beginning of 2023 has seen Bitcoin, the world’s largest cryptocurrency, regain some of its old fervour and pull itself up above the $20,000 mark for the first time since early November. This resurgence has left investors, both long-term and short-term, scratching their heads and trying to decipher exactly what has caused this sudden upswing.
The marketplace is no more rosy now than it was then, with exchange crashes and stories of fraud aplenty. Bitcoin’s much-heralded safe haven characteristic – the ‚digital gold‘ – as it once was called, has never truly come to pass. On top of that, inflation and high interest rates mean we all have less disposable income than we did this time last year and during the pandemic, and investing for a brighter tomorrow is no longer a top priority. So, what’s going on?
A popular myth when it comes to investing is that of supply and demand. The theory is that when something is lacking, it becomes more expensive and sought after, and when it is in abundance, it becomes cheaper and less interesting. This does not appear to be the case for Bitcoin, however, as the currency has not become any scarcer in recent months, and inflation has not been enough to spur a rush to invest.
The answer may lie in the movements of Big Money. Big Money is the catch-all name given to banks, financial institutions, insurance companies, pension funds, etc, who have billions upon billions to invest. These control money markets, and with the current low interest rates, they have been looking for alternative investment vehicles to make their money work. Bitcoin, as a digital asset, provides an attractive return on investment with less risk than traditional markets, and as such, these Big Money investors have been putting more and more money into Bitcoin, driving the price up.
The influx of Big Money has been a boon for the Bitcoin market, and has allowed for more people to get involved in the cryptocurrency market. As more and more people invest, demand for Bitcoin increases, driving the price up even further. This trend is expected to continue into the foreseeable future, with the potential for Bitcoin to reach new highs once again.
The resurgence of Bitcoin may be a short-term thing, or it may be part of a longer trend. The only thing we can be sure of is that the influx of Big Money into the cryptocurrency market will continue to drive the price up and make Bitcoin a viable investment for those looking for an alternative to traditional markets.