Not even a full year has passed when Bitcoin saw a steady drop in its value until it went below $5k mark in March 2020. However, ever since that time, the currency has only seen a constant bull run with a few drops that did not put any pressure on the price of the cryptocurrency. The success has been constant, and it has finally crossed a huge milestone of $50k! At the time of writing this, the value of bitcoin is hovering around $51k and the market seems ever so bullish. The fact that United States government bond yields have seen an improvement also has had no impact on its value is an indicator of how strong the Bitcoin market has become.
The $50k mark has been a major milestone that the cryptocurrency needed to cross to establish its value in the minds of the masses who still believe crypto is not the right place to invest. The price went up by 53% just in the current month alone which is quite staggering. Speculators believe that a major role was played by the announcement from MicroStrategy to increase their Bitcoin reserves further. The company announced a debt sale that was worth $600 million and the money from that was intended for purchasing the new bitcoins. The firm has constantly been buying Bitcoin since August 2020 and their current stash has brought them a profit of $2 billion!
Some people believe that the timing of the announcement from MicroStrategy may have been planned since it was a big factor in helping Bitcoin cross the $50k mark. According to Avi Felman, this was also the case when the company made a similar announcement on December 7th which led to the value of Bitcoin crossing the $20k mark. Felman heads the trading department at BlockTower Capital.
One thing to consider right now is if this breakthrough will hold in the coming days or not. The increase in bond yields and gold going lower could be a threat to its value since Bitcoin is being treated as a hedge against inflation. The same has been the case for gold as well. The bonds have reached a yield percentage of 1.33% which is the highest it has been during the last 12 months. At the same time, gold went down to $1790 per oz. which is the lowest trading value in the last two weeks. Some Bitcoin holders may end up selling their holdings if real yields rise in the coming days which could cause a drop in Bitcoin’s value.
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