Bitcoin price (BTC) cracks 25,000-US-dollar mark – These are the reasons

The Bitcoin price has not only reached a new all-time high, but also cracked the psychologically important mark of 25,000 US dollars.

Even on the otherwise rather quiet holidays, where rather little is traded, the bitcoin price knows no stopping. Why the pressure towards the north is currently so high.

In the morning hours of Boxing Day, the time had come. For just a few seconds, the Bitcoin price briefly touched the 25,000 US dollar mark. Immediately afterwards, the price dropped minimally and now stands at 24,940 US dollars at the editorial deadline. This is an impressive gain, considering that the price was still hovering around 18,000 US dollars at the beginning of December. In the second half of December, the bitcoin price started its final Christmas rally, as the chart shows:

Pressure from institutional investors does not let up

As explained many times before, the bitcoin rally in the last quarter of 2020 is primarily due to institutional investors. In other words, it is not primarily the money of private individuals that is rushing into the market, but that of companies, hedge funds, fund companies, etc.

As in the traditional financial sector, these professional players determine how prices develop. For example, not only has Nasdaq’s Microstrategy bought Bitcoin for another $650 million, as CEO Michael Saylor announced via Twitter on December 21, but so have several traditional investment houses.

Among them would be the American insurance company MassMutual, which recently acquired Bitcoin for $100 million, as well as the hedge fund Guggenheim, which invests up to 10 percent of its five billion fund in BTC. Practically every day, new large investors are added, who acquire Bitcoin, but also other cryptocurrencies, in the two- or three-digit million range. This trend is then also reinforced by private investors, who are also increasingly jumping on the crypto bandwagon again.

Bitcoin price: What’s next?

It is no secret knowledge that many more institutional investors will continue to enter the crypto market in 2021. As the market capitalization of the crypto market remains small compared to other asset classes, these capital inflows should continue to provide support for cryptocurrencies.

Of particular interest here is the growth of traditional securities securitizations. These allow investors without a wallet and a willingness to hold tokens to get into bitcoin and the like. Thus, several new „Bitcoin securities“ such as Exchange Traded Notes (ETNs) have been issued in recent weeks. In this context, the classic securities account is sufficient to be able to participate in the Bitcoin price. This should also be seen as a positive sign on both a private and institutional level.

BTC-ECHO readers had the right instinct

The fact that our readers have a good feel for the price is proven by our screenshot of the Opinary survey that was placed on our site over a week ago. There we asked whether the bitcoin price would rise to over 25,000 US dollars this year. Of the more than 8,500 participants, 76 percent answered YES and were therefore right.

With this in mind, we wish our readers continued good instincts for 2021.