3 Reasons Bitcoin will Continue Its Momentum Post Pandemic

In the last few days, Bitcoin (BTC) was priced over $26,000, considerably up on the year, especially compared to the big March drop that saw it reach just north of $5,000. Bitcoin continues to break pricing records and is now well out of its “hype and fad” phase as individuals and big investors continue to see and embrace its short and long-term value. After the pandemic fades, there’s several reasons for optimism about Bitcoin’s continued price gains and overall momentum through 2021 and beyond.

 

  1. Institutional and Payment Company Interest

According to Scott Morgan, blockchain consultant, entrepreneur, and the Founder & CEO of Crypto Integrity Tao, “Investment firms offering BTC investment in portfolios is rising when other categories are falling in popularity.” His company is a leading blockchain and educational membership resource for businesses across tech, gaming, and entertainment. In addition to institutional interest in Bitcoin, Morgan also notes Economic policy amidst COVID will cause Bitcoin to rise since it is valued in dollars.

Institutional interest in Bitcoin is skyrocketing heading into 2021, with buying from not only large firms, but also rich individuals who see the potential for a new avenue for gains. Deep-pocketed buyers influence Bitcoin’s pricing and will continue to push the cryptocurrency forward in 2021. 

 

It’s not just institutional investors that are valuing Bitcoin as a wise choice to hold capital. Big players in transaction processing like PayPal have also introduced Bitcoin as a payment method. In October 2020, PayPal announced this move which indicated it and other payment companies are accepting Bitcoin as a stable and attractive option for its users. Other firms such as Square are offering Bitcoin through its Cash App service, an easy way to send and receive money, that allows people to buy and sell Bitcoin through their own balance. 

 

  1. The Power of the Underbanked

Approximately a fifth of Americans are either “unbanked or underbanked”, which means they’re without an account or still use services outside traditional banking such as payday loans. There’s distrust among this group about banks’ policies and motives, and the need for more education about the benefits offered by financial inclusion. Bitcoin provides an opportunity for these populations who are often paid in cash and do not have access to traditional debit or credit cards. With COVID-19 accelerating the use of non-cash payments, some of these people will face further pressure to adopt contactless ways to purchase goods and services. The size and influence of this underbanked group presents an opportunity for Bitcoin’s growth and for companies that make it easier than ever to participate in cryptocurrencies. 

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The proliferation of Bitcoin ATMs throughout the U.S. is helping expand access to underbanked groups and improve financial inclusion. Brandon Mintz, the President and CEO of Bitcoin Depot and a leading cryptocurrency expert, states “For underbanked groups that have limited or no access to traditional financial instruments, BTC allows them to avoid various antiquated retail transactions involved in their everyday life, such as buying prepaid cards, sending remittances through legacy money remitters, using bill pay services, and buying money orders. All of these types of transactions can be replaced by using BTC from the comfort of your home using a mobile bitcoin wallet app.”

 

  1. A Surprising Source of Stability

There’s a warranted concern about instability and inflation in the U.S. Approximately 20 percent of all dollars ever printed in the country’s history were printed in 2020 alone. Investors in traditional financial instruments do not have protection from this instability. Bitcoin offers a different play because there’s a finite supply of 21 million coins and its not tied to any single fiat currency. 

 

There’s scarcity built into the Bitcoin model and the growing ease of acquiring and holding the cryptocurrency means it could become a stabler alternative to the U.S. dollar. It provides investors with a way to diversify their asset mix and potentially enjoy substantial portfolio gains. And again, the rise of institutional investment and rich individuals buying Bitcoin points to its underlying stability and promise. These groups do not make investment decisions without studying the fundamentals and developing a case for the potential rewards to outweigh the risks.

 

Disclaimer: This content does not necessarily represent the views of IWB.

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