What’s Driving Bitcoin Prices Today – CoinCentral

Bitcoin has seen a significant spike this year; since April 2020, the price has increased by more than 800 percent to a current value of $60,652, according to a press release. So what are the main drivers of the bitcoin price today?

Investors do not sell

A significant number of bitcoin investors currently own bitcoins. We are selling less, which offsets the selling pressure. According to data recently released by Glassnode, illiquid bitcoin assets have increased significantly in recent months. The trend became even more apparent in May 2020 after the episode of bitcoin’s halving. This has led to a doubling of the difficulty of mining, which naturally suppresses inflation, while the value of bitcoin increases due to its scarcity.

The Glassnode report shows that about 78% of the coins in circulation today are illiquid. There is also strong evidence of continued capital outflows from cryptocurrency exchanges. The problem of illiquidity is compounded by the fact that BTC miners hardly sell their shares. This is a strong bullish signal and an indicator that bitcoin is quickly becoming a popular store of value among investors. Now, the biggest drawback is the exponential growth over the years. To put that in perspective, the price of bitcoin 12 years ago was about $0.006. Today it is worth about $60,000, up nearly 10 million percent.

On the other hand, the price of gold per ounce 12 years ago was about $1,142. Today it costs $1,649.

Accession of institutional investors

Institutional investors are considered the main demand drivers that determine the price of bitcoin. And according to a list published by Bitcoin Treasuries, the number of coins owned by U.S. companies has grown exponentially in the past year. The total reserve is estimated to be about $81.98 billion. The number of companies that have bought bitcoins is increasing. As of December 20202, 29 companies have officially invested in bitcoin, data shows. Today that number has risen to 53.

MicroStrategy Inc. leads the way with a massive investment of BTC 5.2 billion. Tesla and Square are in second and third place with $2.5 billion and $463 million in BTC assets, respectively.

Major influential investors

It’s hard to talk about the key drivers of bitcoin without mentioning the prominent investors who brought the conversation about bitcoin to the general public and increased its adoption. Elon Musk, CEO of Tesla, was one of the most prominent representatives in the room. His company made a significant investment in the digital currency in February this year. The announcement of the move had a major ripple effect among America’s leading companies and enthusiasts. This caused bitcoin and precious metals IRAs to cross the critical $46,000 mark in 48 hours. Tesla not only bought $1.5 billion worth of bitcoins, but also gave customers the option to buy their cars with the cryptocurrency.

Twitter’s Jack Dorsey, as well as hip-hop mogul Jay-Z, have also helped spark the conversation about BTC. In February, they unveiled a new joint bitcoin project called ₿trust, which aims to make bitcoin the currency of the internet. Dorsey also leads Square, an online payments company that owns one of the largest BTC stores in the United States. The company began accepting bitcoin payments in 2018.

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