When it comes to Bitcoin, there are generally two schools of thought – those who believe that it is a digital gold and those who think of it as a payment system. The latter group has been in the ascendancy in recent months as the Bitcoin price has failed to break new ground and has even pulled back from some of its all-time highs.
However, there are a number of underlying factors which suggest that the Bitcoin price could be on the verge of a comeback.
The first factor to consider is the increasing institutional interest in Bitcoin. While the majority of Bitcoin investors are still retail, there is an growing number of institutional investors who are starting to allocate capital to Bitcoin. These institutions include hedge funds, family offices, and even sovereign wealth funds.
The reason why they are turning to Bitcoin is because they view it as a hedge against macroeconomic uncertainty. With central banks around the world printing money at an unprecedented rate, these institutions believe that Bitcoin could provide them with some protection against inflation.
Another factor to consider is the increasing use of Bitcoin by businesses. Over the past year, we have seen a number of major businesses start to accept Bitcoin as a form of payment. This includes names such as Microsoft, Expedia, and Shopify.
As more businesses start to accept Bitcoin, it will become increasingly convenient to use for everyday transactions. This could lead to more people using Bitcoin, which would in turn lead to higher prices.
Finally, it is worth noting that the supply of Bitcoin is limited. There will only ever be 21 million Bitcoins in existence and over 18 million have already been mined.
As demand for Bitcoin increases, the limited supply will put upward pressure on prices.
All things considered, there are a number of reasons why the Bitcoin price could be on the verge of a comeback. While it remains to be seen whether or not this will actually happen, it is certainly something that investors should keep an eye on in the coming months and years.