• Bitcoin has surged past $23K, leading to concerns over its sustainability.
• A Bankless report suggests that the rally could have legs due to large institutional investments.
• The report also points out that the rise in demand for Bitcoin has been driven by the weakening US dollar and the increasing inflation.
Bitcoin has seen a monumental surge in the past few days, surpassing the $23,000 mark on Tuesday. This has led to questions over the sustainability of the rally, considering the fact that last year was a bloodbath for the cryptocurrency market. However, a report from Bankless suggests that this rally could have legs and could be sustainable.
The report pointed out that one of the major reasons for the surge in Bitcoin’s price is the large institutional investments that have been pouring in. This has been driven by the weakening US dollar and the increasing inflation, leading to investors looking for alternative investments outside traditional markets. In addition, the report states that the increasing demand for Bitcoin has been further boosted by its increasing acceptance among major financial institutions, as well as its adoption by corporate giants such as Tesla.
Another factor that could be driving the rally, according to the report, is the rise in the use of Bitcoin as a payment method. With more merchants and companies accepting Bitcoin, the report suggests that this could be leading to an increased demand for the cryptocurrency. This is further being augmented by the increasing number of people who are using Bitcoin as a means of payment for goods and services, as well as a store of value.
The report also notes that the rise in the use of Bitcoin has been further fueled by the fact that it is a decentralized digital currency, meaning that it is not subject to the control or manipulation of any government or central authority. This has made it an attractive investment option for many investors, who are looking to diversify their portfolio and protect their wealth against the volatility of traditional markets.
Overall, the report suggests that the current rally in Bitcoin could be sustainable, due to the large institutional investments, the weakening US dollar, the increasing inflation, and the rising acceptance of the cryptocurrency. However, it is important to note that the success of this rally will depend on the stability of the cryptocurrency market, as well as the underlying fundamentals of Bitcoin.