- Bitcoin has hit a new high of 2020 as the results of the US election become clear.
- Several fundamental factors create a robust bullish background for BTC.
Bitcoin (BTC) broke above the psychological barrier of $14,000 and hit the new 2020 high at $14,488. The pioneer digital currency has gained nearly 5% in the past 24 hours and 9% on a week-to-week basis, though the upside momentum is growing as new buyers join the market.
Bitcoin’s average daily trading volume catapulted to $465 billion, more than ten times as much as on Wednesday. Its market share increased to 64.8%, which is the highest level since June.
Bitcoin wins the US elections
As the presidential election and the uncertainties related to the outcome are mostly over, the cryptocurrency market may sign with relief and focus on its own fundamentals that look stronger than ever now. These factors behind Bitcoin’s stellar growth can provide additional support to the leading digital coin in the nearest future.
Biden’s victory is good for Bitcoin
As FXStreet previously reported, the cryptocurrency industry regards Joe Biden as a more preferable candidate due to his liberal views towards financial innovations and his push for aggressive fiscal stimulus packages.
Bitcoin enthusiasts believe that his presidency may positively affect the cryptocurrency industry as he is expected to make way for the approval of cryptocurrency exchange-traded funds (ETFs) with underlying assets such as Bitcoin and Ethereum.
Apart from that, he is sure to reinforce the anti-inflation agenda by pumping more money into the financial system to help the US economy recover from the COVID-induced recession. In this case, the skyrocketing inflation expectations and growing national debt will divert investors’ attention to digital assets as a safe-haven and capital protection tool.
JPMorgan is bullish on BTC
JPMorgan Chase, one of the largest financial institutions in the United States, has moved from complete denial to creating its own digital currency. The bank has recently launched its JPM Coin for commercial use and started a new business to deal with blockchain and digital assets.
The bank also admitted recently that Bitcoin has considerable upside potential in the long run as it competes with gold as an alternative currency. At this stage, Bitcoin is a relatively small asset class. Still, its share will be growing as millennial investors will become a more important market participant over the next few decades.
Cryptocurrencies derive value not only because they serve as stores of wealth but also due to their utility as a means of payment. The more economic agents accept cryptocurrencies as a means of payment in the future, the higher their utility and value, JPMorgan experts explained in the report.
Hi-tech companies bet on Bitcoin
Many companies publicly traded companies like MicroStrategy and Square are buying Bitcoins to protect their wealth from inflation. Considering the low rates environment and a potential inflation threat, more traditional businesses are likely to adopt this capital protection strategy in the nearest future.
MicroStrategy’s CEO Mike Saylor confirmed that he was satisfied with the recent investments in Bitcoin and said that the company was ready to add exposure to the cryptocurrency market. He believes that Bitcoin investments had lots of positive effects on the company. Namely, MicroStrategy’s shares experienced stellar growth and even outperformed such hi-tech giants as Apple and Microsoft.
PayPal launches crypto support
PayPal’s decision to enable buying and selling digital assets via its platform is another significant boost for the cryptocurrency industry. The payment giant plans to add support for BTC, ETH, BCH and LTC in early 2021, meaning that over 26 million merchants around the world will be able to accept payments in cryptocurrencies, while users will have access to purchasing digital coins directly through PayPal.
The news served as a major catalyst for Bitcoin at the end of October and will continue supporting the positive trend until the end of the year.
Iran adopts Bitcoin as a reserve asset
Sanctions-hit Islamic republic has amended its cryptocurrency legislation to allow miners to use cryptocurrency to fund imports. According to the new law, the crypto can be redirected into the Central Bank of Iran’s funding mechanisms for imports to support the economic activity in the crisis-hit country.
The miners are supposed to supply the original cryptocurrency directly and within the authorized limit to the channels introduced by the CBI, a report by CBI and the Ministry of Energy says.
Other countries are also taking steps to legalize Bitcoin and other digital assets in integrating it into the traditional financial system. Thus, the US Internal Revenue Service requires cryptocurrency holders to report their revenues on transactions with digital assets, while Europe is working on comprehensive legislation for the industry.
Grayscale keeps buying coins
Grayscale Investments continue adding coins to its vaults. Just recently, the company added 75,419 ETH to its Ethereum Trust. According to the financial analyst and editor at Banyan Hill Publishing, the company now owns 2.13% of the total ETH supply.
Meanwhile, Bitcoin Trust holds 456,537 BTC or 2.46% of all Bitcoins in circulation. The net assets under Grayscale’s management surpassed $7.7 billion.
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