Bull market leader rising wave: after breaking the 30000 mark, bitcoin broke through 33000 US dollars. Why is it so bull?

In the new year, bitcoin has risen even more. Bitcoin has been trying unsuccessfully to hit $30000 in the past few weeks, but on Saturday, bitcoin prices finally broke through that threshold and then continued to soar. So far, according to coinmarket cap, the price of bitcoin is up 11% from 24 hours ago to $32540, and its market value is more than $600 billion. Earlier, bitcoin broke through $33000 to $33155. That price is already $10000 higher than the peak set in 2017. Etheric is also rising, currently close to $780, but not as strong as bitcoin, the leader. At present, the bitcoin / ether price ratio is close to 42, which is the highest since May 2020. In the last year of 2020, bitcoin rose by 300%, and even during the global market shock in March last year, bitcoin remained stable. The most frequently mentioned macro background behind this is that the Federal Reserve may continue to maintain the current interest rate level close to zero in the next few years, and institutions including BlackRock and paypal are optimistic about the special currency, which leads to a large number of other investors to follow suit. So in the short run, what are the factors contributing to this rapid rise? One of them may be directly related to the holidays, when bitcoin prices were trading around $23000 before Christmas, when the market was more active. With the advent of the Christmas and New Year holidays, bitcoin’s upward breakthrough ushered in a favorable time when the mainstream financial markets are in the closed stage. At the same time, the number of bitcoin in circulation in the market has decreased due to the entry of large institutions, resulting in a structural imbalance between supply and demand in the short term. According to cointelegraph analysis, the number of bitcoin purchased by grayscale, a well-known bitcoin investment institution, is three times that of bitcoin mining output in December. At the same time, the purchase of PayPal, cash app and other institutions also leads to a decrease in the number of bitcoin actually in circulation in the market, which may lead to a further increase of bitcoin in 2021. Another point worth noting is that many people regard bitcoin as a substitute for gold, so they transfer assets originally used to allocate gold into bitcoin. JPMorgan Chase, the best-known institution to hold this view, believes that bitcoin’s “digital gold” concept is sucking investors’ money away from precious metals. So far, the ratio of bitcoin to gold has broken through 16, surpassing the previous high of 15.6 set in 2017. What’s the next bitcoin price? Nicholas Pelecanos, head of investment at NEM, a digital currency trading company, believes that bitcoin prices are likely to rise to $50000 before Valentine’s day. “I think it’s at the beginning of a bull market.” But Pelecanos also said that such a long and rapid rise in any asset is a warning. “I appeal to those who trade bitcoin not to be caught up in this passion.” (more wonderful financial information)

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