Pioneer crypto asset and foremost by market capitalization, Bitcoin, has enjoyed so much glitz since the inception of the year 2020. The crypto-asset had a staggering rally which left the market in euphoria.
Climbing from its December price of $6,400 to its latest high of $10,522 during the week, the crypto asset left so much to the imagination regarding its astounding progress.
Amidst so many speculations of the asset having a pullback, it rather maintained its rally to sit at its current price of $9,904 after a slight pullback, accumulating gains of more than 60% in the last two months.
While BTC‘s rally propped Altcoins, Ethereum in particular and others such as XRP, Tesla, however on the general outlook, Bitcoin’s growth far outweighed other crypto assets except these ones mentioned.
A Wall Street investor cum Galaxy Digital CEO, Mike Novogratz offers a logical explanation as to why BTC surged so much in the last two months.
Liquidity, a Catalyst for BTC’s Growth
In a CNBC interview, Novogratz adduced BTC‘s astounding growth to more money in the economy pointing to the global drive by the central banks to achieve a zero interest rate, for instance, last year, Fed Reserve embarked on a three-time interest rate cut.
Asides this, the apex banks are continually striving to inject more liquidity into the market through the open market process, therefore bringing about increased demand for stocks and other scarce assets like Bitcoin.
2020: BTC’s Path Indicates an Optimistic Trend
In an earlier Bloomberg interview, the CEO of Galaxy Digital had explained why he anticipates BTC’s positive trend may be sustained into the long term outlook.
First, BTC is gradually advancing to become a digital safe-haven asset which could accentuate its prices even more. He stated that BTC is becoming more attractive to investors referring back to geopolitical incidents such as the Coronavirus outbreak and when palpable tension struck as to an impending escalation between Iran and the US and how BTC had proven itself as digital gold.
Second, an injection of liquidity into the capital markets accompanied by the global drive for the central banks to achieve a low-interest rate led to a devaluation of fiat currency all over.
With this move, Novogratz opinionated the seeming inflation created by the apex banks will prop up safe-havens like gold and Bitcoin. He believes by the mid-year 2020, BTC’s inflation rate will be reduced by 50%.
Third, he believes with the recent technology advancement in the crypto industry, which he refers to as infrastructural, he believes the stage is been set for BTC’s expansion. Crypto on-ramps which had been long desired but with the creation of Bakkt and others, BTC would likely record more investment inflows which will buoy the crypto asset’s price.
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