The number of digital wallets containing more than 1,000 bitcoin units has grown to an all-time high. According to the Bitcoin Rich List, roughly 2,190 separate wallets contain 1,000 units of bitcoin or more each, which makes sense considering the circumstances that have surrounded the world’s most popular – and largest – cryptocurrency by market cap as of late.
A High Number of Growing Bitcoin Wallets
As it stands, more and more people are beginning to view bitcoin in a positive light. In addition, they see it as a “safe haven” – something that can be used to potentially hedge their wealth against inflation and other harsh economic conditions. Bitcoin is being viewed as a protective tool against many of the financial problems of the world.
In addition, it looks like institutional players have become far more involved in bitcoin and crypto investing. Grayscale recently reported more than $1 billion in bitcoin investments during its second quarter for 2020. That means more than $300 million in bitcoin investments occurred each month for a period of roughly three months.
The currency’s status as a powerhouse financial asset is growing every day, but if all this is true, then why is bitcoin’s price continuing to shrink? The reputation is expanding, but the actual price is not. At the time of writing, bitcoin’s price is at its lowest point in weeks. The currency is trading for $11,200, which is about $200 less than where it stood just yesterday.
One of the big reasons for this is because the United States Federal Reserve recently announced that it was going to permit inflation beyond two percent.
This means that the U.S. dollar is going to continue to weaken via the government’s permission. Naturally, a weakened dollar can only mean betterment for bitcoin and the world it presents, but the fact that the Fed is being so “casual” about the whole thing is likely sending people into a mental whirlwind, and thus the early results may be catastrophic.
In fact, it is assumed by some analysts that bitcoin could drop to as low as $10,000 before any sort of bullish behavior occurs for BTC again in the coming weeks.
Let Things Play Out First
To be fair, diehard traders shouldn’t be that shocked about the currency’s present behavior. We’ve seen this time and time again where BTC reacts negatively to news on the short term and is bumped down to a lower level on the financial ladder. From there, however, it usually manages to pick itself up.
And the fact that even if bitcoin does fall it will remain in five-figure territory is always a good sign and shows that the strength and resilience bitcoin has become known for in recent years hasn’t left the wings just yet, so perhaps traders should just wait things out a bit before reacting.