When Bitcoin originally came out all of those years ago some adventurous investors hopped on what they saw as a potential investment platform. Some hopped on just because it was new. It didn’t take long for the prices to surge and make some investors pretty wealthy. After that though, it lowered to a more reasonable price.
For a while, we only heard of Bitcoin here and there. Sometimes about Bitcoin being used to fund illicit transactions. That changed in February.
The February Bitcoin Explosion
February was a big month for Bitcoin. The cryptocurrency raised to an all-time high value. The value reached $58,352. This was part of a sudden surge in the market that came last month. A surge that didn’t last long, by the end of the month the markets corrected themselves.
Besides the value of the individual Bitcoin, Bitcoin’s overall market cap hit 1 trillion dollars.
Bitcoin wasn’t the only cryptocurrency to experience a temporary rise in value. Ether also saw a rise to its all-time high of $2,033.08. Ether is the second most prominent currency in the crypto space and it is logical the trend would follow.
Looking at a chart of the value of Bitcoin, the graph appeared very much like a bell for the month of February. It started out at just over thirty-two thousand before it surged up to its all-time high and then dipping down to just over forty-three thousand.
Despite the rise in the cost of Bitcoin, people aren’t being deterred from investing. Over 2.9 million new Bitcoin accounts were created in February despite the rise in value. This was on par with the number of new investments in January. The average size of transactions on Bitcoin sat at $500. This is up from 2020.
At times during February Bitcoin was outperforming or matching the stock market. It exceeded the S&P by 1600%. Nasdaq was outperformed by Bitcoin by 300%. This was a very surprising trend, one that could spell a good future for Bitcoin.
No matter which way Bitcoin goes from here, February will be a milestone in the history of all cryptocurrencies. A milestone that will be remembered either way that the trend goes from here.
Ongoing Bitcoin Trend or Other Factors?
Many people wonder if this is part of an ongoing trend to buy cryptocurrencies like Bitcoin. Is that true? Or was there something else behind the sudden surge in the value of Bitcoin and Ether?
Since the end of 2020, cryptocurrency has been grabbing hold in ways that people thought wouldn’t happen. Warren Buffet called Bitcoin worthless after all. But banks and other institutions have become more interested in cryptocurrencies.
One of the most established banks, BNY Mellon began its own venture into cryptocoin this year, becoming a custodian for cryptocurrency. A good amount of people never expected cryptocurrency to be able to get any ground when it comes to traditional financial institutions but we are seeing a change in that. Two other major financial institutions started looking at Bitcoin, Deutsche Bank, and Mastercard.
Companies Investing In Bitcoin
It isn’t just banks that are changing their mind on Bitcoin and other cryptos. Shark Tank personality Kevin O’Leary was once a crypto-hater and now has decided to reallocate a portion of his investments toward Bitcoin. O’Leary is also encouraging companies that he invests in to also allocate some of their investments into Bitcoin.
Some of the companies that invested in Bitcoin in February included Tesla, MicroStrategy, Square, and BlackRock. These are some big companies and their investments aren’t taken lightly by onlookers.
As you can see a lot happened with Bitcoin all in one month. This is a large amount of movement in the crypto world, all in one month. Some would say that years were put into one month when it comes to the change in the crypto market.
Because of the big changes seen in the cryptocurrency world, Goldman and Sachs is restarting the cryptocurrency desk that it shut down in 2017. Financial experts are viewing this as either the onset of a new trend to protect investments or the potential for an implosion in investments.
Tesla and Cryptocurrency
With the popularity of Tesla, and CEO Elon Musk, it shouldn’t be any surprise that people paid attention when they invested in cryptocurrency. Tesla announced in February that they were planning to buy 1.5 billion worth of Bitcoin, a large move for any company. That move was part of the price increase that we saw in Bitcoin but it also fueled further investments in what has been referred to now (and in the past) as the Musk Effect. When Elon Musk starts to make investments or changes a lot of the world follows behind.
Another contributor to the upward global trend in Bitcoin investment has been the uncertainties in the market. People see Bitcoin as a more secure option for their investments when everything around them is so uncertain. Cryptocurrency also relies far less on human management than most investment accounts.
The Trend of Cryptocurrency as a Capital Investment
In the past, a good portion of cryptocurrency investments were social ones. Meaning the investments were made by people investing. A recent change to that trend is highlighted by this article. More and more of the recent investments in crypto, Bitcoin, in particular, has been capital investments by companies.
One of the reasons for the trend towards investing in crypto by businesses is the liquid return. Not many financial investments offer the same amount of liquid return as cryptocurrency. Most investments lack the same yield as crypto, thus, with the search for alternative investments crypto was only a logical choice.
It will be interesting to see where cryptocurrency goes from here. Especially Bitcoin, as it’s been the leader for a while. Despite some thinking that digital currencies are likely only temporary, chances are that we will see some form of digital currency taking off with such a questionable market state. Not to mention the fact that almost everything is going digital now anyway. We just aren’t sure when this will happen, it could be this year or it could be years in the future. If the big corporations are setting a trend though, it could be sooner rather than later.
The next few months will be a big decider in what will happen with Bitcoin. In the past, after Bitcoin has gone to peaks, it has trended down. In the past, this has ended with people losing money on their investments because they wanted to get out. So far there is no sign of a massive price correction coming. People are continuing to invest in Bitcoin to help protect themselves and their futures.