Bitcoin (BTC) recently set records by breaking the $4000 mark and the popular cryptocurrency shows no signs of slowing down. In fact, many investors are predicting that BTC may once again be in a position to reach $5000. This is occurring in spite of BTC’s recent split into two separate currencies. Many predicted that the branching off of bitcoin cash from the blockchain would lead to stark drop, but aside from the first two weeks following the split, both cryptocurrencies have continued to rise.
Coinciding with BTC’s rise, which began roughly two months ago despite a brief drop below $4000, analysts also observed a massive shift away from stocks by investors. The move has been linked to both BTC’s rise and the development of technologies that have made investing in cryptocurrencies more straightforward. Furthermore, the rise of tokenized asset markets have opened up traditional markets to cryptocurrency traders.
The withdrawal rate away from the <a title=”stock” market” href=”https://cointelegraph.com/news/investors-pull-billions-from-stocks-as-new-bitcoin-crypto-options-appear”>stock market</a> over the past 10 weeks represents the largest shift of its kinds since 2004. Around $32 billion has been moved out of the market since late June.
One of the hardest markets hit is precious metal trading, with investors choosing to move away from the volatile commodity for the more promising, albeit younger, frontier of cryptocurrency. While precious metals comprised about 10 percent of private client portfolios just thee years ago, that number has dropped to around two percent in 2017. Silver spot price dropped significantly, falling from a substantial $30 to today’s rate consistently staying below $20.
While this surge of interest in cryptocurrencies is equal parts a response to both the steady rise of BTC and the lukewarm performance of traditional stocks and commodities, it is likewise a result of the ease which less tech-savvy trades can now invest in cryptocurrencies.
At its inception, interest in BTC was primarily relegated to both miners with the resources needed to enable blockchain transactions and users adopting the currency for use on the so-called “dark web.” Recently, dedicated exchange companies have made it possible for investors to make bulk investments. Additionally, some of these exchanges facilitate trade of traditional blue chip stocks by “tokenizing” them. This tokenized asset market allows investors to avoid the listing and transaction costs associated with traditional markets, with the added benefit of a shorter settlement time. That said, this aspect of BTC trading is relatively young, but given the current flight of investors from traditional trading, these tokenized markets should see plenty of activity, and therefore opportunity to prove themselves.