Despite the gains and the continuous surge in the price of Bitcoin, many critics anticipate a potential burst of this “bubble”.
Bitcoin (BTC) has continued to delight investors as it has soared past the $41,000 price mark, a new all-time high and beating its own earlier records. According to CoinMarketCap, one Bitcoin is now worth as much as $41,934 at the time of writing and representing a gain of over 8.7% in the past 24 hours.
Bitcoin continues to delight its holders as well as new investors as the obvious price gains are synonymous with profit, particularly for those who have taken a position with the coin at an earlier time. The rally in 2020 was majorly attributed to top institutions around the world buying up the coin while the current ongoing rally has been attributed to a surge in the buyup by retail investors who fears missing out on this current bull run.
Despite the gains and the continuous surge in the price of Bitcoin, many critics anticipate a potential burst of the growth they tag as a bubble. The anticipation of a price correction however has neither deterred the new investors nor has stirred the old ones to sell off their accrued gains, a move that can fast track the prophecies from these critics.
Impact of Retail Investors on Bitcoin Price Push to New Records
Undoubtedly, the bulk of the BTC in circulation currently is within the coffers of less than 5% of the investors who have taken a position in Bitcoin. While a majority of the 5% include institutional adopters and the very wealthy individual investors, data from retail-focused cryptocurrency exchanges reveals that retail investors helped to significantly push Bitcoin price beyond the $41,000 benchmark
The Revolut app reported that it registered about 300,000 new cryptocurrency customers over the last 30 days as bitcoin tested new and higher price levels and eToro noted that it had 61% more unique bitcoin holders on Jan. 4 than it did a year earlier, and 49% more unique holders of ether, another virtual currency according to a report from CNBC.
With the market appearing crowded, analysts believe even if there is a price correction at this time, the general trend of bitcoin is bullish.
“There will be volatility, which is natural after the gains we have seen, but the long-term trend is clear,” Simon Peters, market analyst at eToro, told CNBC. “Crypto is moving into the mainstream, and more and more investors are adding exposure.”
But pending when this volatility will push Bitcoin price below the current support set at $41,000, the crypto sphere anticipates how high this bull run will go.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.