After 10,000 dollars on the site for more than 100 days, Bitcoin enters a positive feedback loop (www.blockcast.cc)

November 2020 is a special month. The U.S. election has captured the attention of people around the world. Bitcoin has regained its footing at $14,000, breaking through the high point since January 2018. It has risen nearly 40% in the past month .

Many people are surprised by the extent of Bitcoin’s rise during this period. In fact, data from multiple sources shows that this growth is the result of the continuous improvement of Bitcoin’s fundamentals in the past few months.

1. Standing for $10,000 for more than 100 days

November 4th was the 100th day when Bitcoin stood at $10,000. This situation has never happened before. Even at the craziest time in 2017, this record was only maintained for 63 days.

The last time it fell below $10,000 was on July 26th. Since that day, Bitcoin has started to set a record, and the price has never fallen below $10,000. It should also be noted that Bitcoin has exceeded $11,000 for 26 consecutive days and over $13,000 for 12 consecutive days. The current record is still increasing.

The market has reached a stage of accumulation, and various indicators can prove this. For example, the number of bitcoins that have not moved for more than a year has been increasing, the number of addresses holding at least $1 has reached historical levels, and the number of bitcoins in major exchanges The currency balance is decreasing.

(Changes in Bitcoin balance of centralized exchanges)

Bitcoin’s price volatility has been slammed by opponents, but now people see the reality: volatility is not the fault of Bitcoin. As long as you become the “HODLer” of Bitcoin, the volatility of Bitcoin will become your biggest Assists.

Except for the two months from the end of 2017 to the beginning of 2018, any day in the past decade, you will be profitable buying Bitcoin. No matter how much Bitcoin fluctuates, you only need to adopt one strategy: use the dollar cost average (DCA) method of purchase (it refers to a strategy in which investors divide the total investment to regularly purchase specific assets) .

2. The arrival of big companies put Bitcoin into a positive feedback loop

MicroStrategy, a company listed on Nasdaq, adopted a strategy of using Bitcoin as the company’s main reserve asset. Under the leadership of CEO Michael, MicroStrategy made two large-scale acquisitions of BTC in August and September.

Currently, MicroStrategy has 38,250 BTC. The company bought BTC at a total price of US$425 million (including transaction fees), with an average price of approximately US$11,100 each.

MicroStrategy’s strategy is very effective. Since the beginning of 2017, MicroStrategy’s report has shown that the company’s net income from business operations is $78 million. But after only holding Bitcoin for two months, he gained 100 million U.S. dollars after the Bitcoin price approached 14,000 U.S. dollars.

With the effectiveness of this strategy, more and more companies may use this approach to enter the Bitcoin field in the future. Jack Dorsey’s Square company did the same thing in early October 2020.

As a world-renowned payment provider PayPal, it recently announced that it will start to support cryptocurrency payments. In the future, millions of users will be able to buy bitcoin directly on it.

A series of positive changes in the past has caused Bitcoin to enter a positive feedback cycle. The Bitcoin craze is right before our eyes and nothing can stop it.

3. The positive feedback loop will promote Bitcoin

The positive feedback loop will drive the price of Bitcoin. No one knows what height Bitcoin will reach in the next few months. It is only a matter of time.

All the positive news about Bitcoin is increasing people’s attention to Bitcoin. More and more people are aware of the existence of Bitcoin, and the addition of large companies will also help change people’s stereotypes of Bitcoin . It is no longer a dangerous item left to criminals, but a real value for use. system.

As attention increases, so does the demand for Bitcoin. This not only promotes large companies, but also promotes institutional and individual investors to buy Bitcoin. A few weeks ago, a study published by the University of Cambridge pointed out that Bitcoin users broke the 100 million mark, and there are 400,000 active users on the network every day, which is a proof of the growth of the Bitcoin network.

As we have seen recently, rising Bitcoin prices will cause more volatility. This volatility will cause mainstream media to talk about Bitcoin more and more, and it will draw more people’s attention to Bitcoin. Although there are still many obstacles to mass adoption, being seen is the prerequisite for adoption, and things are moving in the right direction step by step.

Conclusion

According to historical law, before the fourth Bitcoin halving starts in 2024, Bitcoin will most likely enter the price correction stage in 2022 and 2023. Previously, as most people expected, the first two years will be the golden age of Bitcoin.

It has been six months since the third halving event on May 12, 2020. Historical data tells us that this time period is when the bull market begins to take shape after the halving, and this time seems to be no exception.