Since mid-October, the price of bitcoin has risen quite rapidly. On many exchanges, including Binance, the value of the coin exceeded its highest price point. On November 30, 2020, bitcoin reached $19,800 on Binance.
Several factors are important to explain the rise in bitcoin's value, but none of them can fully explain the rise in price. What can be said for sure is that bitcoin has come to be seen as an asset for inflation protection. More and more investment funds are flowing into it.
The return on gold from the beginning of the year to date is 23%. Bitcoin shows a similar, but very pronounced trend with a return of about 248% during 2020. MicroStrategy, Square and many others have added bitcoin to their portfolios. PayPal launched custodial (depository) cryptoservices with a potential reach of up to 26 million people worldwide.
Thanks to the development of regulation, licensed custodial organizations have appeared in the last three years. Entering the cryptocurrency market has become noticeably easier. Products supporting a wide range of currencies are now available. The interfaces and usability of cryptocurrency projects have become much better.
The cryptoinvest market share of futures and derivatives has grown. Bitcoin's open interest (consisting of futures and perpetual contracts) recently reached its limit and exceeded $6 billion. Growing macroeconomic uncertainty has prompted private and institutional investors to take another look at bitcoin.
Classic institutional investors came to the bitcoin investment. This has made bitcoin a defensive asset. Interest is growing - those who used to turn their backs on bitcoin have come to believe in it. The rate is shaped by supply and demand. It is no longer any different from the stocks of big companies. It has limited issuance, which means the price will only go up as interest grows.
The value of mining investment is increasing against the backdrop of the overall demand for this asset. It is due to a number of reasons. The most serious one is the large influx of institutional investors into bitcoin. Large funds and banks began to buy bitcoin in large volumes.
The reason is the global crisis amid a pandemic, the volatility of the world's largest economies and the U.S. presidential election. All of this has affected traditional assets. Bitcoin investment is a way to "escape" to a more profitable asset. The low value of this cryptocurrency at the beginning of the year and the potential for strong growth also played a role.
It is safe to say that it worth invest in bitcoin mining. It has already hit its all-time high. Experts tend to assume that the price will rise and move up until about January. Then there will be a downturn, as there was in 2017. As soon as the first big player pours his assets into the market, others will follow to lock in their profits and continue to look for best cryptocurrency to invest.