According to the data collected by the investment company, the current pandemic has played an important role in the choices of investors
While the price of Bitcoin continues to rise and traders are trying to reach the new all-time high, the wave of mainstream financial institutions approaching Bitcoin (BTC) is not stopping.
Unlike the 2017 bull run, this time both institutional and retail investors want to accumulate Bitcoin: data on crypto derivatives shows that big players are driving BTC-based product volumes skyrocketing.
The volume of BTC futures per single exchange. Source: Digital Asset Data
The volume of BTC futures per exchange. Source: Digital Asset Data
According to research by Grayscale Investments, a digital investment management company that currently holds over $10 billion in assets under management, the coronavirus pandemic could be one of the main drivers of Bitcoin’s current growth.
According to the company’s survey, 83% of all Bitcoin investors Bitcoin Superstar scam started in the last 12 months, a period when COVID-19 infections were minimal.
38% of current Bitcoin investors surveyed have made their first purchase in the last four months, and among them, 63% said that the economic turmoil caused by COVID-19 influenced their decision to invest in BTC.
Bitcoin is becoming mainstream
Grayscale’s figures also show that Bitcoin is becoming increasingly popular among the general public and investors. In fact, in 2020, 55% of respondents expressed interest in buying Bitcoin, a substantial increase from 36% in 2019.
Almost half of the survey respondents also believe that cryptocurrency will be a mainstream medium of exchange by the end of the decade.
It is likely that the tendency of investors to be attracted to the idea of Bitcoin as a reservoir of value is growing, and it is possible that mainstream adoption may come sooner than many believe. Just think of a recent Citibank report, in which the author estimates that the price of BTC could reach $318,000 by December 2021.
Will Bitcoin become less attractive once COVID is defeated?
According to some investors, the question of how the price of Bitcoin will react to the defeat of COVID-19 is extremely relevant. According to Jonathan Hobbs, author of The Crypto Portfolio and a former digital fund manager, the effects of the pandemic will be felt for a long time, even after the disease itself is finally defeated. Hobbs told Cointelegraph:
„The Covid-19 was the match that lit the flame of institutional adoption. But the wood was already accumulating from before. Now that the fire is burning, however, it will take a lot of water to put it out. When the world is finally free of Covid-19, the economy will still be full of debts.
And central banks will continue to print money to try to get rid of those debts, as they did after the 2008 financial crisis. This means that the narrative that Bitcoin is a good defence against inflation will probably continue after the end of the pandemic“.
It is clear that the massive economic stimulus plans and the expansion of monetary policy have changed the economic picture in the near future. While some analysts may overestimate the impact of the pandemic on Bitcoin’s growth, it is clear that it has played an important role in accelerating investor interest in cryptocurrency.
One of the main positive factors identified by investors are the low barriers to entry into the Bitcoin world and its ability to gain value even when there is a lot of volatility in traditional markets is now proven. That said, these elements are likely to continue to have a significant impact on BTC even when the pandemic ends.