Bitcoin – the New Tulipmania
The bull cycle that started in 2020 Bitcoin has exceeded the price of $60,000 at the beginning of 2021. The aftermath of the halving, as well as the bull market phase, is has undoubtedly put Bitcoin in the limelight and triggered a lot of new investments from particularly prominent institutional and retail investors. So much so that the attention that Bitcoin has gained is compared to the Tulipmania, which marked the 17th-century in Holland.
But unlike Tulipmania, the bull market phase of Bitcoin doesn’t show signs of stopping, and it is only gaining more investors and reaching higher prices. If you’re also new to the Bitcoin ecosystem and its bullish market phase, here we explain how Bitcoin has become one of the most all successful cryptocurrencies and why it is deemed a precious asset.
Background Information of the Bull Run
One of the reasons why Bitcoin has managed to achieve huge growth in such a short span of time is the fact that this is a very rare cryptocurrency. The overall supply will of Bitcoin was set at 21 million BTC because Nakamoto wanted to make sure the cryptocurrency remains decentralized and deflationary.
Furthermore, Nakamoto, to achieve this goal, also created a protocol that halves the block reward of the miners every four years, and with that, it reduces the available supply. Or, in other words, it slows down more than the number of new bitcoins that are entering the market. As each halving reduced the reward, and the effects on the price became even more apparent.
What Fuels the ‘Tulipmania’
If you’re wondering what fuels this popularity of Bitcoin and Bitcoin investments, the first essential factor is the availability of online trading sites. It would be impossible for people to quickly gain BTC without registering online exchange sites. One great example is the Immediate Bitcoin that is an advanced auto-trading system which means it is a proper choice for beginners and experts alike. Moreover, the system is able to quickly derive conclusions from extremely large data sets and adapt to changing market conditions. Plus, to register here, you only need a deposit of $250.
Price of Bitcoin
More specifically, the halving that took place on the 11th of May 2020 decreased the block reward from 12.5 to 6.25 BTC. Before the event, the price varied, but stayed in the range of $8000 to $9000. After the halving, the price climbed to approximately $9,999. Then it followed an upward trend and broke several records.
For example, the first record we broke in November when it exceeded $18,000. Next, in December, it broke $20,000. This made one of the most successful and important years of Bitcoin, where the price has increased by 170%. Next, what a lot of experts have predicted was an even higher price in January. Bitcoin’s price peaked at $40,000. What’s more, the interest of celebrities and corporations in BTC produced an unprecedented value of Bitcoin of over $60,000 in March.
The value of Bitcoin is also affected by the supply and rising demand. There are a couple of factors that restrict the supply, including bitcoin halving in the already finite number of BTC which makes the cryptocurrency quite scarce.
In addition, the attitude of the investors is changing, and most institutional investors, and also huge chunk of retail investors, are looking to get BTC because they consider it a good store of value for their long-term investments.
Furthermore, the fact that we have already mined approximately 18.5 million BTC is also driving the hype around this cryptocurrency. With that being said, there are available options in obtaining Bitcoin, and it is the perfect time to consider your investment options, especially since it is predicted that the last Bitcoin will be mined, at this rate, in 2140.