The Bitcoin explosion during coronavirus

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Bitcoin has seen tremendous surges in recent weeks, reaching over $ 40,000. An astonishing explosion in 2021, a year when the COVID-19 pandemic undermined the economy.

How does bitcoin’s explosion of its value explain?

This is not the first time that the price of bitcoin has soared. Already in 2017, we experienced a similar scenario. This time, the price explosion is due to more fundamental elements, including the acquisition of Bitcoins by world-renowned institutions such as PayPal or JP Morgan. The entry of these giants is motivated by the search for yield and more profitable and diversified investment solutions vis-à-vis the depreciation of traditional assets. A depreciation was caused by monetary policies dictated by the Covid19 pandemic. Additionally, PayPal’s statement proclaiming the use of bitcoin as a means of payment, and the scarcity of bitcoin itself has supported this increase. Technically, bitcoin offers itself as an alternative safe haven that appreciates over time,

Can we expect a drop in the coming months?

The volatility on the cryptocurrency markets in general and bitcoin, in particular, remains very high compared to other markets, and a correction is always possible, but the trend over the medium and long term is upward, especially as institutions tend to preserve this asset. However, the technology behind cryptocurrencies, “the blockchain”, is still immature. And it is faced with a lot of technical and economic constraints.

Why do many countries ban these crypto-currencies?

Vast countries worldwide remain suspicious of this subject since the circular ban on cryptocurrency at these banks. Several projects and efforts have been undertaken to adopt blockchain for professional use. In my opinion, Some countries need to embark on the blockchain shift because it is a historical turning point that should not be missed.

Will the value of Bitcoin increase further in the future?

Bitcoin continues to convince financial players worldwide, and COVID-19 and its economic fallout have boosted this. Financial centers such as JP Morgan, Black Rock, and Guggenheim have interested in the subject. Scott Minerd, CEO of giant Guggenheim, said bitcoin would hit $ 400,000 in 5 or 6 years.