The bitcoin price has achieved a new all-time high once again this week at $10,884. The market valuation of bitcoin has surpassed $180 billion, securing a market valuation that is higher than most major financial institutions.
Factors of Bitcoin Price Increase
Initially, optimism surrounding tens of billions of dollars in institutional money being moved into the bitcoin market triggered investors within the cryptocurrency and traditional finance markets to invest in bitcoin. Most notably, Coinbase CEO Brian Armstrong estimated the amount of bitcoin investment from institutional investors to be at $10 billion.
Armstrong further emphasized that the lack of infrastructure and liquidity has prevented institutional investors from investing in bitcoin and that the vast majority of large-scale investors are now committed to investing in bitcoin and the cryptocurrency market.
“By some estimates, there is $10B of institutional money waiting on the sidelines to invest in digital currency today. When we speak with these institutions, they tell us that the number one thing preventing them from getting started is the existence of a digital asset custodian that they can trust to store client funds securely”, wrote Armstrong.
Major hedge funds and investment firms such as the $95 billion Man Group have released their official plans to invest in bitcoin after the launch of CME’s bitcoin futures exchange. But, a significant number of investors have already engaged in bitcoin trading, as demonstrated in the daily trading volume of bitcoin.
Last month, the daily trading volume averaged around $3 billion, a volume that is lower than that of Apple, the most liquid stock on earth. Recently, the daily trading volume of bitcoin peaked at $10 billion, and is currently stable at around $8.6 billion.
Bitcoin settles a similar amount of trades as major US stock markets. Some exchanges such as South Korea’s Bithumb, for instance, surpassed the daily trading volume of stock markets in their respective countries. Bithumb’s daily trading volume is at around $2 billion, larger than the daily volume of KOSDAQ, South Korea’s leading stock market.
Separating Money and State
Erik Voorhees, a highly regarded bitcoin investor and the CEO of ShapeShift, one of the largest cryptocurrency exchanges that account for 3 percent of the entire Bitcoin network’s transaction volume, stated that bitcoin is continuing to grow at an exponential rate because people are willing to separate money and the state.
“There is no currency more virtual than the US Dollar”, wrote Erik Voorhees, adding, “Why does Bitcoin keep growing? Because it’s time to separate money and state.”
Bitcoin eliminates power from the authorities to manipulate the global monetary system and the fiat currency system through inflationary policies. It allows its users to remain in absolute control over their money and wealth through a censorship-resistant financial network.
As such, bitcoin provides more financial freedom and independence to the people, while weakening the leverage of authorities over the global finance sector.