El Salvador President Nayib Bukele took a victory lap on Monday after the Bank of England’s British pound rapidly depreciated against the dollar. The institution has since resumed quantitative easing. Its action marks a clear pivot that many in the Bitcoin community predicted central banks would be forced into months in advance. Bukele’s Callout Bukele tagged the Bank of England with a triumphant “Told you,” over Twitter, scoring over 14,000 like and 2000 retweets from his followers. His brief comment…
This week, the value of the cryptocurrency market, driven by a major rally, reached the $2 trillion mark. Within two months, the cryptocurrency market capitalization has doubled as retail and institutional investors pile up in the space, according to the price-tracking site CoinGecko.
More than 50% of the entire crypto market is accounted for by Bitcoin, the largest digital currency. This year alone, Bitcoin has rallied over 100% and has continued to boost the cryptocurrency market.
Crypto is Finally Gaining Traction
Cryptocurrencies, which were initially developed as a digital payment system to circumvent banks and other financial intermediaries, have lately gained traction. Crypto enthusiasts describe BTC as digital gold among mainstream investors that can serve as financial cover against the growing inflation.
The number of institutional investors and significant shopping retailers planning to incorporate crypto as a payment method is growing. Among them, Tesla Inc. recently disclosed that it bought bitcoin worth US$1.5 trillion. The largest asset manager in the world, BlackRock Inc., is also reportedly dipping a toe in the same water. And Miami City is considering people paying taxes in Bitcoin.
Big Wall Street players have also decided to reevaluate the cryptocurrency. BNY Mellon, the oldest bank in the U.S., said it would offer custody services for bitcoin and other digital currencies last month. Meanwhile, JPMorgan has said it’s looking seriously into bitcoin.
It’s more evidence that cryptocurrency, once the domain of outsiders, moves ever closer towards the mainstream, where major companies, governments, and, yes, even ex-PMs are confident enough in its future to either use it or talk it up.
The pandemic has also transitioned trading online, driving consumers away from physical coins and bills. COVID-19 has also prompted the central banks to create massive amounts of fiat currency, teeing up that bitcoin and other digital assets can be a way out from the prospect of inflation and traditional currency depreciation.
The Bull Run is Nothing Like 2018
Without oversight or consumer protection, Bitcoin Magazine stated that Bitcoin in 2017 was similar to the Wild West. The money was flowing from Bitcoin into an ICO rash that plummeted below its original listing price in 2018 by more than 86 percent.
The money from fiat flows to Bitcoin in 2021; the publication says—altcoin volumes are comparatively small, seeing as Bitcoin is being accumulated in the long term, not as a means of shifting capital. People did not panic sell during the recent dip despite major publications reporting warring speculations of a resembling market pattern to that of 2018’s.
The crypto 2021 bull run, welcomed by former critics, institutions, and high net worth investors, ultimately seems more stable. With the continued cryptocurrency knowledge and acceptance, crypto could become a robust wealth store and a reliable alternative to fiat currency.