Beyond $51,000: why is bitcoin going up?

The price of bitcoin is rising again.

Today it made another all-time high, surpassing $51,000, but it has more or less been going up since late January. 

In fact, after reaching $42,000 for the first time in its history on January 8th, 2021, it had declined a little, reaching $30,000 again on January 27th. 

But then it started to rise again, so much so that on February 8th it was back above $40,000, partly due to the news of Tesla’s investment. 

On the same day, it actually broke through the $45,000 mark, and the next day went as high as $48,000. 

Over the next five days, it lateralized between $44,000 and $48,000, but on February 14th it had already broken above $49,000 for the first time.

Yesterday, it had tried to break through the $50,000 mark for the first time, but failed to do so, while today it has not only managed to do so, but has also reached $51,000.

Compared to January 27th, the price has risen by 70%, while compared to January 8th, it has risen by 21%. Where did this rise come from? 

The news that explains why bitcoin is rising

A lot of this is certainly due to Elon Musk and Tesla. In fact, after touching $42,000, many expected a retracement, which happened. But this retracement did not only stop at $30,000: it was also very short-lived. 

Indeed, on January 28th Elon Musk put #bitcoin in his official Twitter bio, tweeting “In retrospect, it was inevitable”, and the price suddenly rose from $30,000 to $38,000, only to fall back to $32,000. 

At that point, a new rush to buy BTC was triggered, due not only to initiatives by other companies or institutional investors, but probably also by many retail investors.

The second jump, as mentioned earlier, came on February 8th with the news of Tesla’s purchase of $1.5 billion in bitcoin, which was followed by other similar news.

However, it was not only the purchases that drove the price up, but above all the numerous reports of large companies, or even financial institutions such as Visa and MasterCard, announcing their entry into the crypto market in various ways. 

However, it has to be said that it is mainly bitcoin that has benefited from the growth in recent days, probably due to other news about the monetary policy of the Federal Reserve (Fed), the US central bank. 

It appears that the Fed is unwilling to end its campaign of creating and distributing dollars in the markets until the level of unemployment in the US returns to pre-crisis levels. 

The fact is that to date there is no clear indication of when this goal might be achieved, so it is to all intents and purposes a campaign with no set end date. 

It is worth mentioning that the inflationary risks of the US dollar, which are closely linked to the Fed’s expansionary monetary policy, are most likely the main reason for the enormous interest that US companies and financial institutions are placing in bitcoin, given its deflationary nature. 

Therefore, the less likely it is that this expansionary campaign will come to an end, the more players are looking to BTC as an alternative that can reduce their losses due to possible dollar inflation. 

Yesterday, Anthony Pompliano tweeted: 

Bitcoin is at $50,000 and the government is about to flood the market with another $1.9 trillion.

I wonder what is going to happen next…

— Pomp 🌪 (@APompliano) February 16, 2021