For Bitcoin investors, it is a really merry Christmas, when the blockchain soared on Christmas Day to a new all-time peak.
In the last 24 hours, the price of Bitcoin shot up by 5.8 percent, peaking at $25000, according to CoinGecko.
The price of Bitcoin has pulled back slightly; at the time of publishing, it is priced at about $24,378.
It follows a week in which Bitcoin has plowed through previous peaks, on December 19 hitting $24,085.
Why the new peak?
When global buyers buy up large volumes of the blockchain, rising demand for Bitcoin results in a supply crisis; market analytics company MicroStrategy introduced a $650 million investment to its Bitcoin portfolio in the last week, taking the sum to over 70,000 Bitcoin.
MicroStrategy has purchased an additional 29,646 bitcoins for $650 million at an average price of $21,925 per #bitcoin and now #hodl an aggregate of 70,470 bitcoins purchased for $1.125 billion at an average price of $15,964 per bitcoin.https://t.co/j6wVLXIzoa
— Michael Saylor (@michael_saylor) December 21, 2020
The short-term Bitcoin bull case is focused on two key factors: institutional accumulation and the cycling of Altcoin gains into Bitcoin. As inflows into Grayscale begin to rise, both patterns are still underway, although altcoins lag behind BTC.
The combination of Bitcoin’s heavy institutional accumulation and the altcoin market’s drying liquidity fuels the short-term Bitcoin bull case.
Santiment, an on-chain business research company, tweeted: “In the vast majority of #crypto assets outside $BTC and $ETH, liquidity has decreased rapidly as the year comes to a close.” This suggests that much of the competition in crypto is already focused on Bitcoin.
Bitcoin’s Historic Year
There’s no doubt Bitcoin has had a great year, cutting through $24,500 on Christmas Day and setting up another all-time high.
The new price comes a week to the day that Bitcoin set the previous $24,122.67 record.
Bitcoin’s year-to-date percentage increases have risen to over 240 percent with the new price rise.
The Bitcoin boom, along with the long-sought stamp of approval by revered celebrities such as Michael Saylor, Jack Dorsey, and Paul Tudor Jones, was exacerbated by the adoption of the network by PayPal.
The linked consumer awareness and media recognition of celebrities such as rapper Logic and the recent institutional buy-in from MassMutual continue to lift the price and sentiment of Bitcoin (BTC).
As the work-from-home dynamic sparks digital revolution, the tide continues to intensify and 2021 seems progressively to be an action-packed year for the next phase in the growth of the Blockchain network.
The $21,000 level is especially necessary for Bitcoin to continue its rally in the near term. Exchange heatmaps registered stacked sales orders at approximately $21,000 to $21,500, which suggested that BTC price had to break through to see a greater uptrend.
The Future of Finance
Bitcoin has been named the future of finance since its conception. Those who endorse Bitcoin say that it allows a much simpler, low-fee payment system easier for transactions across the globe.
Bitcoin can be exchanged in traditional currency, but it is not funded by either the government or the central bank; the dollar exchange rate actually attracts future investors and merchants interested in the investment of currencies.
Indeed, one of the major factors why digital currencies including Bitcoin are rising is because they may act as an alternative to domestic monetary cash and gold-like traditional properties.
In March 2014, the IRS declared that all virtual currencies, such as Bitcoin, will be treated as property rather than currency. Profits or losses held from bitcoins as capital will be realized as capital gains or losses, while bitcoins retained as inventory will incur ordinary gains or losses.
Selling bitcoins that you extracted or obtained from another user, or utilizing bitcoins to pay for goods or services are instances of transactions that could be taxable.
The most popular way to obtain Bitcoin is to purchase on a Bitcoin exchange, although there are many other ways to acquire and own Bitcoins, such as mining, over-the-counter selling, or Bitcoin faucets, but lately, faucets have run empty.