empty
22.01.2021 11:03 AM
Why do people buy bitcoin despite its high price?

This image is no longer relevant

People are attracted by stories of newly minted bitcoin millionaires. In addition, traditional financial companies are starting to invest in digital currencies. Therefore, more and more new people are coming to the cryptocurrency market.

Novice investors buy cryptocurrency to follow the trend. They invest a small portion of their savings in the asset. There are a lot of people who feared the first cryptocurrency, considered it to be something dangerous and did not buy it while it was very cheap. Now those who were not afraid have become millionaires.

2020 has been a phenomenal year for many assets. Many people have started trading stocks on their own, taking advantage of commission-free trades amid the coronavirus pandemic. Bitcoin rose sharply at the end of last year. This trend continues. Bitcoin peaked at nearly $42,000 in early January.

More than 530,000 new accounts were registered in the first 17 days of 2021, according to the Israeli-British investment platform eToro Ltd. Moreover, the number of new users on the platform who invested in cryptocurrency for the first time has grown by more than 100% compared to 2020.

In order to calm the bitcoin hype, financial regulators and banks are issuing strong warnings. So, for example, the British financial regulator said that people should be prepared for the fact that they may lose all their money. And UBS reminded investors that bitcoin is risky and could go to zero, giving Myspace and Netscape as examples.

Bitcoin's appeal was supported by the fact that people were suddenly able to buy and sell things with Bitcoin on Paypal.

Some financial advisors note that it would be safer if clients invested no more than 5% of their investments in cryptocurrencies.

On the one hand, bitcoin's advantage is mainly that it will replace traditional banks and brokers. On the other hand, many people who buy bitcoin are willing to store it in the bank because there are no suitable alternatives.

Some investors see bitcoin as part of a long-term strategy and intend to give this investment to their children, assuming that the price of bitcoin will double in value.

Meanwhile, today bitcoin is trading at $31,338

This image is no longer relevant

Kate Smirnova,
Analytical expert of InstaTrade
© 2007-2025

Recommended Stories

S&P, Nasdaq, and Dow climb in sync as markets digest jobs data and trade developments

The S&P 500 rose by 0.83%; the Nasdaq gained 1.02%; the Dow advanced by 0.77%. US job growth exceeded expectations in June. Tripadvisor rallied on Starboard Value's report. Synopsys

13:11 2025-07-04 UTC+2

US Market News Digest for July 4

The S&P 500 and Nasdaq stock indices rose by 0.83% and 1.02%, respectively, hitting new all-time highs. Index futures, however, retreated due to concerns over the potential introduction

Ekaterina Kiseleva 12:45 2025-07-04 UTC+2

S&P, Nasdaq, Dow rally as markets react to jobs, trade policy surprises

S&P 500 up 0.83%; Nasdaq up 1.02%; Dow up 0.77% U.S. job growth beats expectations in June Tripadvisor rises on Starboard Value report, gaining share Synopsys, Cadence rise as U.S

Thomas Frank 08:23 2025-07-04 UTC+2

What could tip USD: NFP, Fed moves, or Big Beautiful Bill?

Wall Street keeps churning out record after record. On Wednesday, the S&P 500 , driven by IT giants, once again set a fresh all-time high. The catalyst was not only

Svetlana Radchenko 13:17 2025-07-03 UTC+2

US Market News Digest for July 3

The S&P 500 index once again reached an all-time high thanks to sustained demand for technology stocks and a positive reaction to the US-Vietnam trade agreement on tariffs. Investors

Ekaterina Kiseleva 12:58 2025-07-03 UTC+2

Stocks Ride: Nasdaq Jumps, S&P Rises, Dow Falls — There's More Behind It

Nasdaq Closes 0.94%; S&P 500 Up 0.47%; Dow Down 0.02% Centene Falls After Cutting 2025 Outlook Tesla Rises, Rebounds From Early Week Losses Wall Street Futures Up 0.1%, Nikkei Flat

Thomas Frank 10:28 2025-07-03 UTC+2

US Market News Digest for July 2

The S&P 500 index declined by 0.11%, the Nasdaq 100 lost 0.82%, while the Dow Jones rose by 0.91%. Investors are awaiting the release of macroeconomic data that could influence

Ekaterina Kiseleva 12:32 2025-07-02 UTC+2

Tesla falls, European stocks rise

Tesla Shares Fall as Musk-Trump Feud Renews Powell Doesn't Rule Out July Rate Cut Mixed Signals in US Manufacturing Labor and Contracts European Stocks Rise on Wednesday, Led by Industrial

Thomas Frank 10:56 2025-07-02 UTC+2

Stock Market Rises Higher: What's Pushing Dow, Nasdaq, S&P Higher

Bank Stocks Rise After Fed Stress Test Tesla Shares Fall Gold Rises as Oil Prices Fall on OPEC+ Output Expectations Zealand Pharma Gains After BNP Opens Coverage with 'Outperformance' InPost

Thomas Frank 12:11 2025-07-01 UTC+2

US Market News Digest for July 1

Monday's trading ended in positive territory: the S&P 500 rose by 0.52%, while the Nasdaq 100 added 0.47%. The start of the second half of the year unfolded amid optimistic

Ekaterina Kiseleva 11:43 2025-07-01 UTC+2
Can't speak right now?
Ask your question in the chat.
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaTrade anyway.

We are sorry for any inconvenience caused by this message.