Bitcoin has incurred another slight period of growth this morning that took it all the way to $12,400. At the time of writing, the currency has settled down a bit just beyond the $12K mark.
Bitcoin Has a High Price; This Keeps Some Traders Out
No matter how you look at the situation, it’s easy to say that the price of bitcoin – the world’s largest and most popular cryptocurrency by market cap – has seemingly entered one of its best bull phases in recent years. At the same time, however, there are catches to bitcoin entering bullish territory, as it can sometimes prevent retail investors from wanting to take part in trading.
According to Simon Peters, a crypto analyst at famed crypto exchange e-Toro, when the price of bitcoin gets too high, retailers are often reluctant to make purchases and get involved in the crypto game. In a recent interview, he states:
As bitcoin’s steady push higher continues, it is worth bearing in mind that a high bitcoin price can sometimes create a psychological barrier for the retail investor. Just like investors can get fractional shares, cryptocurrency investors can hold fractions of bitcoins, yet the fact remains that many retail investors will want whole bitcoins and the price of attaining them is moving further out of reach.
Granted bitcoin continues to move up, there is a chance that retail players will not want to get involved in the game, which could wind up biting bitcoin in the bud. However, one also must assume that with bitcoin’s rising price, the presence of institutional or professional traders will likely increase given that they have greater access to wealth.
We are already witnessing the growth of institutional players in the BTC space. Despite the surging price, many of these figures have shown that they don’t mind the cryptocurrency exploding as it’s been doing. They’re willing to dish out the funds necessary to get their fingers on digital assets.
One such example is MicroStrategy Inc. CEO Michael Saylor explained that his company has recently purchased as much as $250 million in bitcoin units. This proved to be a solid move on his part, given that the buy was made when bitcoin was trading in the $11,000 range. Now that the currency has shot up, he’s already made some hefty profits.
Institutional Traders Are Becoming More Attracted to BTC
In an interview, Saylor mentions:
This investment reflects our belief that bitcoin, as the world’s most widely adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.
Saylor’s thoughts on cash owning appears to be shared by many people as of late. Given that the coronavirus is still running rampant and the government is planning to shell out more stimulus money, many are worried that overprinting is taking place, which could lead to inflation and other economic problems.