Bitcoin Halving Impact Fades as Demand Takes Center Stage
According to reports, the Open Interest in Bitcoin is now 30 times higher than it was 11 days before the 2020 Bitcoin halving.
The price of Bitcoin s continuous increase now stands as evidence that the demand for cryptocurrency is still rising, and that the token is now a popular safe-haven asset. As the new year kicked off, the price of Bitcoin price smashed yet another record high, bagging a new high against gold.
Bitcoin price moved past $29,000 USD, reaching a high of 15.40 gold ounces, according to MarketWatch. This is the first time it has hit this level against gold and has surpassed the previous all-time-high against the precious metal since December 2017 during its last bull rally.
2020, the year of the bull rally beginning
December 2017 went down in the books for cryptocurrency as the first major bull run to send Bitcoin into the spotlight of mainstream investment. Now, 2020 stands as the year Bitcoin caught the attention of institutional investors, sparking a fresh bull run and further adoption of the cryptocurrency market. Over the year, Bitcoin saw a yearly low price in March of $4 106,98 USD in comparison to 2020’s high of $29 600,63 USD, showing a monumental 620.7% between the two. The increase since the beginning of the year also stands at an impressive over 300% gain from January 2020 to December 2020.
While gold also enjoyed increasing prices over the year, as investors opted to hedge against the US dollar, the gains made nowhere near the same impressions that Bitcoin’s did. Over the year, gold posted a 25% gain from the beginning of the year to the end.
As the cryptocurrency market surges, some believe that Bitcoin is attracting the attention of investors who would have otherwise opted for gold. This, perhaps, because of the convenience that cryptocurrency can offer (from portability, use of ease, and decentralised factors) while gold cannot. While both assets are limited in supply, the cap of Bitcoin is more evident, while there is uncertainty with the supply remaining of gold. Whether or not this is the case, the figures speak for themselves: Bitcoin demand has grown significantly over the year and the hedge against the dollar is looking more and more digital.