Bitcoin has reached a peak of its value in 2021 when its price has surged over $60,000 and further boosted its entire market capitalization to $1 trillion.
Market capitalization is an important indicator for investors that want to add BTC to their portfolios and as Bitcoin is experiencing a substantial bull market phase. Here we explain more about market capitalization and the factors that enhanced the total market cap of Bitcoin in 2021.
Before we dive into the factors that are affecting the bull run of Bitcoin, we will explain what market capitalization is and why it is an important indicator. Typically, market capitalization is defined as the relative size of the cryptocurrency.
When the market cap of a cryptocurrency is higher, it is considered a less volatile cryptocurrency, and it takes a more dominant position in the market. Bitcoin is one of the best performing cryptocurrencies in the last ten years, and with its market cap of $1 trillion, it’s one of the largest cryptocurrencies in the market.
Factors That Affect the Bull Run
There are several factors that drive the bull run of Bitcoin. Some of them are the institutional support, supply of BTCs, the market demand, and other factors. First, Bitcoin halving is a major factor that splits in half the available supply of BTC, and slows down the pace at which new BTC enters the market. Furthermore, the halving is called ‘halving’ because it halves the block reward that consists of Bitcoin tokens every four years.
Moreover, the demand for BTC has been steadily growing over the years, which changes the position of the supply and demand, and because the demand is higher than the supply, the price is also soaring. The bull run of Bitcoin enhances the market capitalization because, as the price increases, so does the total market cap of the cryptocurrency.
Bitcoin Liquidity and Trading Sites
Following the popularity of Bitcoin, the number of online trading sites was also increasing. This also helps with the liquidity of Bitcoin, which is a valuable attribute that makes Bitcoin a great asset that is easy to trade, buy and sell online.
One example is Immediate Edge which is a state-of-the-art automated trading system that is associated with high accuracy trading levels because it is based on Artificial Intelligence technology. It’s perfect for investors that are just starting out in this field because it doesn’t require much input from its members. You only need to deposit $250 to register on the site, and you can earn up to $800 on a daily basis.
Another reason why Bitcoin has reached new, higher prices is that it has restricted the supply of BTC to 21 million. About 80% of this total supply has already been mined, or 18.5 million BTC are in circulation, which further makes Bitcoin a scarce digital asset.
In addition, every halving reduces the current pool of BTC, but that also enhances the value of Bitcoin. In fact, according to the data from the past halvings, the price always surges months leading up to the next event and also after the halving. In 2020, the value of BTC went from $9,999.93 to $20,000 in December, and it tripled in value by March 2021 to $60,000.
The Bottom Line
In conclusion, the supply of BTC is going up at a slower rate than the demand, and this enhances the bull market phase of Bitcoin. Also, the accessibility offered by online trading sites only fuels the digital gold rush. On top of that, institutional support from great investors like Tesla, Square, crypto trust funds trigger a higher demand for BTC and promote the mass adoption of cryptocurrencies in our society.