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Does Long-Term Investing Benefit Bitcoin’s Growth?

Bitcoin’s ascent in 2023 has been nothing short of impressive, with the cryptocurrency’s value surging by almost 100% in just a month. The current bull run has even surpassed the much-hyped surge of 2017, with Bitcoin hitting a new all-time high of $61,895 on March 13, marking the fourth breakout of the year. A Glassnode report has revealed that Bitcoin’s long-term holders (LTH) are holding on to their positions and not selling for profits, indicating that the cryptocurrency is becoming a reliable and steadfast investment choice for many.

Conversely, short-term holders (STH) who have engaged in wallet activity within the past six months are more likely to engage in speculation and profit-seeking behaviour, leading to price volatility in the short term. Learn more here about the factors contributing to price volatility and the impact of short-term holders on Bitcoin’s market dynamics. Despite this, Bitcoin continues to assert itself as a viable and stable investment option, with its long-term prospects appearing increasingly bright.

The Rise of Bitcoin as a Mainstream Payment Option

Bitcoin has come a long way since its initial criticism by institutions in 2017. As new information and data emerge about investor sentiment towards the cryptocurrency, Bitcoin has overcome scrutiny in some parts of the financial sector and is now regarded with a different perspective. Despite concerns about its volatility and high risk, institutions have shifted their focus towards Bitcoin and are now framing it as a currency with high potential for investment. The cryptocurrency’s volatility has also decreased in the past year, thanks to an influx of steadfast investors who recognize its long-term investment value. Consequently, Bitcoin has become a safe investment choice by a lot of people, though it was doubted a couple of years back. Bitcoin has witnessed its worth surge during the last 3 weeks, however institutional investors are primarily accountable for the rise. Although short-term or retail slots affect the cryptocurrency’s value via enhanced trading volume, Bitcoin’s intrinsic worth has increased considerably, as a result of a rising number of companies recognizing it as a genuine payment system.

The surge of institutional money coming from businesses including Tesla, PayPal and MicroStrategy is actually the biggest element in Bitcoin s surge. These institutions have publicly acknowledged the utility of Bitcoin by investing millions of dollars, thereby lending credibility and legitimacy to the cryptocurrency as a valuable investment choice. As more and more businesses and institutions continue to embrace Bitcoin, its growth trajectory appears poised for continued success.

The Role of Long-Term Investors in Establishing Bitcoin as a Mainstream Investment

Robby Gutmann, CEO of NYDIG, is among those who believe that we may be entering a transformative period for Bitcoin, characterized by a steady stream of significant milestones. According to Gutmann, financial institutions are displaying a keen interest in investing in the cryptocurrency, underscoring its growing mainstream appeal. Meanwhile, research conducted by Arcane Research suggests that long-term investors remain committed to accumulating Bitcoin and have little incentive to sell their holdings, thereby stabilizing the market and reducing volatility.

As more new investors enter the market, they may help to further balance out price fluctuations and establish Bitcoin as a more reliable and attractive investment option for mainstream investors. Bitcoin has repeatedly demonstrated its resilience and longevity, solidifying its position as a viable investment option. As companies increasingly look to diversify their holdings and reduce their reliance on cash, many are turning to Bitcoin as a reliable store of value. In a significant development, Morgan Stanley recently became the first major US bank to recognize the value of Bitcoin and offer private Bitcoin funds to their clients, signalling a growing acceptance of the cryptocurrency as a legitimate asset class.