In a world plagued by a deadly global pandemic, high unemployment rates, trade wars, riots, and a near-total economic shutdown, investors around the world are actively looking for high performing assets, uncorrelated investments, and safe havens to store their fast depreciating wealth in.
This search has led to the increased popularity of the crypto market with Bitcoin leading the way in market liquidity, acceptance, and future growth potential for investors.
The cryptocurrency also has numerous benefits over other asset classes being that it is completely decentralized and autonomous from any government or cooperate organizations unlike other safe havens and fiat currencies controlled and manipulated by governments and government institutions.
Growing Market Capitalization and Future Demand for Bitcoin
The Covid-19 pandemic revealed a lot of cracks and failures hidden in our current financial system, these cracks will only get worse after the pandemic and are predicted to:
- Make the current financial system very ineffective
- Widen the gap between the rich and the poor
- Bring about a lot of debt and public unrest
- Cause one of the worst recession we have ever experienced in human history and
- Bring an end to the financial system as we know it.
However, the government is making the situation worse with the unlimited amount of stimulus programs, fiat money printing, and government social interventions going on around the world.
The image above clearly shows how the major Central Banks all over the world have steadily increased the quantity of printed money year over year to create an illusion of a growing economy. This, however, as a lot of negative effects like the increasing debt, higher cost of living, and inflation skyrocketing.
These unfavorable policies have pushed more and more investors into the Bitcoin market where the government has little to no power. And this demand will only increase post coronavirus crisis, making Bitcoin a better and more effective alternative to other traditional investments like gold, silver, bonds, stocks, and crude oil.
The Bitcoin On-Chain Analysis and What It Tells Us About Bitcoin Traders
The BTC Balance on Exchanges metric, used in On-Chain Analysis, is a very important analysis carried out on the daily activities of traders when it comes to them selling and buying Bitcoin.
The orange line on the chart above represents the quantity of Bitcoin traders selling to exchanges. The lower the line the lesser Bitcoins are sold and vice versa.
Currently, that orange line is at its lowest point, telling us that more and more investors are buying and opting to hold onto their Bitcoin in anticipation of the up-trending move to continue.
A lot of institutional investors have also begun buying the Bitcoin in bulk for their clients as they prepare for a post coronavirus hyperinflation and economic recession.
Why Is Bitcoin a Better Investment?
Over the years, Bitcoin has seen a rise in popularity and acceptance by numerous investors, crypto enthusiasts, and companies all over the world.
One of the main drivers for this exponential growth in interest and influx of new investors into the Bitcoin market is how cost-effective and easy the cryptocurrency makes paying of goods and services and transferring money around the globe is.
Not only that, but Bitcoin also has little to no correlation with other traditional investments, making it the perfect asset to invest in when it comes to diversifying your risk and investing in an instrument that can withstand and thrive in the current economic onslaught we are facing. This is without losing value or being manipulated by the government.
How Far Can Bitcoin Grow?
The Bitcoin market is still relatively new; however, this cryptocurrency has outperformed all other asset classes year after year and has gained a 6,000% rise in value in just a short while.
The currency still has a long way to go even as more and more investors, businesses, cooperate organizations and countries are adopting it as a viable instrument to invest in and transact with. So investing in it right now is the best decision you can make.
Stock To Flow
The famous stock to flow ratio model is showing us that Bitcoin is going to $288,000 within 2 years. This might sound like a very optimistic prediction, but this would actually just be a repeat of how the Bitcoin price has been performing the past 11 years.
When will Bitcoin reach $1,000,000? No one knows, but it’s clear that current events around the world will push the price up there faster than previously expected. Remember, every new dollar printed is another reason to buy Bitcoin.