A special year for Bitcoin with the currency making fresh All Time HIghs
This year has been very exciting for Bitcoin, as it kept making news from the beginning of this month as the digital currency kept making fresh All time highs and then broke its way above the 20,000$ level.

Bitcoin started this year at 7,500$ levels and now is at 23,400$ price range, it’s price appreciation has been around 200%. .

 Rewinding back, many of us were sceptical about the rising price prospects of Bitcoin

Now from the end of the year, if we look back we witnessed huge crypto crashes, one was the Black swan event, black Thursday which occured on March where stocks, Bitcoin and gold all fell in tandem as people sold these assets for cash, anticipating economic troubles due to Corona virus induced lockdowns. At that time, most of us were very doubtful about Bitcoin’s price prospects as we knew it was going to be a dull year for the world economy with lockdowns, unemployment and people not having money to invest on perceivably risk-on asset classes like BTC.

 Now, the world is bullish on Bitcoin even after it’s costlier than what it was a few months ago

Fast forward to now, Bitcoin has now without any doubt proved to be a profitable investment asset and is attracting a lot of large institutional investors, so much that talk is happening of a Bitcoin supply crisis where more Bitcoins are being bought up this year than what’s coming into circulation after miners mine them and then sell them to exchanges and OTC markets where they can be purchased by investors.

Infact, Bitcoin miners are HODLING onto their BTCs, selling very less portions of it which is accentuating this resulting Bitcoin supply crisis. So, the value of Bitcoin has more room to appreciate, as it’s price will increase with there being more demand for BTC than it’s supply.

Views this year kept echoing to buy Bitcoin, gold and silver and stay away from stocks!!

THis year experts advised investors to put their wealth onto gold, silver and BTC and stay off from purchasing stocks. The logic was that with such an economic turmoil in the global economy that’s hit with Covid-19 induced lockdowns, most of the businesses were not doing well, so fundamentally their stocks that represent the companies’ performance can’t be doing well as well.

True, that some stocks managed to be performing well but that is not due to their performance, it’s because their stock prices were inflated with the money that came from US stimulus. The money that Governments of the world gave to the companies in the form of stimulus measures to survive and sustain themselves during the lockdown, was used to buy back company stocks, and keep the share prices in float.

Therefore fundamentally, stocks were in a bubble that can burst after a point as stimulus could not keep the stock performance up sustainable. The natural way for any company's stock price to pick up would be through the company’s performance - sales, profits, growth and such metrics.

However, there were some stocks that did well fundamentally this COvid-19 year, because of successful sales, business and speculation ofcourse because they were on to creating a product that has potential in future. These stocks which I will delve into further in the next article beat Bitcoin’s price which as mentioned grew by over 200% from it’s January prices this year.

Bitcoin bulk buying by institutional investors to hedge against the US dollar

Right now, institutional investors are buying up BTC at prices far from BTCs lows this year - 14,000$, 17,000$ and 20,000$ . The obvious reason is because they are hedging against fiat inflation as constant printing of stimulus money by Governments of the world looks imminent to depreciate the value of their respective fiat currencies, depleting the value of major world currencies like the US Dollar, that is traditionally supposed to be a supreme currency, as it’s the world’s reserve currency.

Countries of the world hold foreign currency reserves of the US dollars as the US dollars is the most accepted currency when conducting international trade. The dollar is thought to have an upper hand compared to other currencies of the world. However the public may quite well be losing trust in the status of the dollar, with the National debt of the United States increasing to huge levels, the result of which may someday be the collapse of the US dollars. Ouch!!