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Bitcoin’s rise has coincided with the pandemic and lockdowns imposed around the world
A decade after Bitcoin was launched by a pseudonymous person or group of persons, named Satoshi Nakamoto, it has become the world’s largest and most valuable cryptocurrency. For long, Bitcoin remained in the shadows but in 2017, it began gaining prominence when its price rallied from $777.76 to $19,497.40 during the year. But then the gains were lost. By March 2020, Bitcoin was again back to trading at $5,000. However, that year Bitcoin’s value rose nearly 300 percent, outperforming gold by a factor of 10. By the end of December 2020, the cryptocurrency was trading at record highs of close to $30,000.
That performance by Bitcoin led some analysts to say that the cryptocurrency was in the midst of a third great price rally in its 11-year history until then. Around this time, the perception of Bitcoin began changing, investors started seeing it as a “digital gold” and a store of value. New investors saw in it an opportunity to grow wealth at a rate unmatched by any other investment instrument. Despite its highly volatile and speculative nature, the cryptocurrency began to take hold, finding its feet among the masses as a cash alternative.
Also, its rise coincided with the pandemic and lockdowns imposed around the world. With economies struggling to remain afloat, funds began to move out of stock markets rapidly and pouring into gold and cryptocurrency. Bitcoin, which was born out of the 2008 financial crisis, benefited from the next big financial shock the world got.
This year, Bitcoin’s journey began on a hyperactive note. Towards the end of February, Bitcoin had risen over $55,000. The price rise was backed by Tesla’s announcement that month that it had acquired $1.5 billion worth of the digital coin. After a brief lull in March, it reached its lifetime high of nearly $65,000 in April this year. Then again, the cryptocurrency market crashed in May as China tightened crypto mining within its territory. Bitcoin’s price was reduced to less than half of its peak, below $30,000. The price has stabilised since and Bitcoin is now trading above $42,000.
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