The rise of Bitcoin in 2020 has been phenomenal so far. Its prices have surged by 50% to 128% against some of the leading national currencies in the world. Experts around the world believe that the growth of Bitcoin will continue rising ahead.
Bitcoin vs Leading National Currencies in 2020
Is the value of Bitcoin alone responsible for Bitcoin performing better against many national currencies? Well, the current economic climate has battered the value of many national currencies. The value of currencies of the emerging markets has specifically faced the brunt of the global economic crisis this year. Hence, some analysts believe Bitcoin is rising because fiat currencies are dropping against both the gold and the bitcoin.
A Twitter user under the pseudonym of Driftwoodpalace compared the performance of leading national currencies against Bitcoin. His analysis considers the price of Bitcoin from January 2020 against the value of national currencies. His research shows that the price of Bitcoin has seen an increase of 50% to 128% against leading national currencies.
Bitcoin has performed comparatively better against devaluing currencies with high rates of inflation such as the Argentinian Peso and the Venezuelan bolivar. Bitcoin’s price saw a 103.5% gain against the Argentinian Peso.
The Venezuelan bolivar is also facing uncertainties because of the hyperinflation in Venezuela. Hence, Bitcoin is performing very well against the Venezuelan bolivar. So far, Bitcoin gained 92% against the Venezuelan bolivar. Bitcoin prices have gained against the reserve currencies too, and not only against the currencies of emerging countries. Bitcoin recorded between 56% to 69% gain against the USD and the Euro.
Rising P2P Trading Volume Amidst Unstable Economies Around the World
Many countries around the world have unstable economies. The Latin American region, especially, is more susceptible to such instability. This instability is contributing to the growth of the P2P Bitcoin trading market. The P2P Bitcoin trading volume is setting a record volume of trades in African, Latin American, and the CIS countries.
At the same time, many leading P2P Bitcoin trading platforms like Bitcoin Global, Paxful, among others, are coming out with innovative features for the bitcoin traders. For instance, Bitcoin Global came out with a price equation for its trader community. The price equation will alleviate the worries of its users about their advertisements being out of order. Bitcoin Global’s users would also be able to connect their BTC rates to multiple sources.
With the price equation, the Bitcoin Global users can also make their equation. They can create their equation through the available operators. Additionally, their users can also use the operators to make the equation show values in their national currencies. It will make it more convenient for the users to trade on their platform. As of now, Bitcoin Global’s price equation supports five exchanges. These are WhiteBIT, Bitstamp, Kraken, Coinbase, and Bitfinex.
Many P2P Bitcoin trading platforms are coming out with such innovative features. At the same time, BTC prices are also rising. Thus, more and more users are joining the crypto revolution. An increase in the number of BTC sellers and buyers is also contributing to the strong performance of Bitcoin.
Rising Institutional Interest in Bitcoin
The rise in the Bitcoin prices and the global economic turmoil has led to a rise in institutional interest in Bitcoin. The CME Bitcoin futures market has crossed a figure of $700 million in terms of total open interest. Are you wondering why the data from the CME Bitcoin Futures market is important? It is because this CME Bitcoin Futures market is specifically tailored to institutional investors. CME is a strictly regulated US-based derivatives company. It is the largest derivatives company in the world.
The assets under management of Grayscale also proves that the instructional interest in Bitcoin is rising rapidly. Many analysts use the data regarding AUM of Grayscale to gauge the institutional interest in Bitcoin. The Grayscale Bitcoin Trust is among the handful of vehicles that the institutions can use to get exposure to the cryptocurrencies.
There was an inflow of $1 billion in the cryptocurrency products of Grayscale in the first half of 2020 alone. Grayscale wrote in its second-quarter report that other products are receiving an allocation from the 81% of returning institutional investors. The trust said in the first quarter that 88% of the investments came from the institutional investors.
MicroStrategy, a publicly listed firm from the United States, with a billion-dollar valuation, bought Bitcoin worth $250 million recently. This purchase is the primary treasury asset of MicroStrategy. The popularity of Bitcoin is also soaring among the leading Wall Street investors. Paul Tudor-Jones calls Bitcoin, the asset, that has the most potential to act as a hedge against inflation.
Bitcoin is Evolving into a Store of Value
The world is facing an economic crisis because of COVID. All governments around the world had to enforce a months-long lockdown. They did it in the hope of containing the spread of the virus. It had emptied the government coffers and made them print more currencies. An increase in paper currencies in economies can cause an uptick in inflation. It has got investors worried.
On the other hand, Bitcoin is posting tremendous returns since April. It is performing quite well against all leading fiat currencies of the world. Hence, both small-time investors and institutional investors are pumping money in Bitcoin.
The growth in the prices of Bitcoin is more substantial. It is because the Bitcoin prices dropped by 20% in March 2020. A 20% drop in the prices of BTC was far more than the drop monitored in the prices of other commodities in March 2020. Yet, the Bitcoin prices rebounded strongly with one Bitcoin worth over $11,500 now. The interest in Bitcoin is very strong. It can be proved by the fact that the recent Twitter hack did not leave a deep impact on the prices of Bitcoin.
We believe that the BTC will continue rising amid the global economic turmoil. Bitcoin’s performance against the emerging as well the global reserve currencies proves it. The prices of Bitcoin posted the strongest gains against the Brazilian Real, Argentinian Peso, Turkish Lira, South African Rand, Russian Ruble.