Bitcoin recently hit a new all-time high. NurPhoto/Getty Images
Bitcoin’s upswing is leading to a surge in crypto wallets reaching the million-dollar mark, Kaiko Research reports.
The token’s recent rally suggests that Bitcoin is more than a passing fad, according to investor and author Ruchir Sharma.
“It is extremely unusual for a bubble to burst and then recover so quickly to reach new highs,” he wrote in the Financial Times.
This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by a real editor.
Bitcoin’s recent surge to an all-time high is helping more than 1,500 wallets cross the million-dollar mark every day, Kaiko Research reports. Year to date, the trend peaked on March 1st with 1,691 wallets. Given the decentralized nature of cryptocurrencies, it is difficult to determine the ownership behind these addresses. And it is possible for multiple wallets to belong to a single person or entity.
Since the beginning of the month, Bitcoin has gained another 16 percent. The upswing has continued. This began in mid-January when regulators approved Bitcoin spot ETFs for trading in the US. Bitcoin’s new success may indicate that the cryptocurrency is here to stay as a mainstream investment, Ruchir Sharma, investor, author and chairman of Rockefeller International, said in the Financial Times.
The token’s 2022 high and crash may have vindicated the crypto skeptics. However, the token’s quick recovery highlights a more solid investment thesis. In 2021, Bitcoin has often been lumped in with other favorites of the day trading crowd, such as unprofitable tech and meme stocks. Today, these other bubble stocks are trading, on average, at half their peak. In contrast, Bitcoin recently hit an all-time high. It is extremely unusual for a bubble to burst and then recover so quickly to reach new heights. This suggests that something real and lasting is afoot.
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Sharma pointed out that about 70 percent of Bitcoin accounts are inactive. This means that investors buy to hold the token. Meanwhile, increasing institutional commitment will see the ETF market grow from $50 billion (approximately €45.8 billion) to $300 billion (approximately €274.8 billion) by 2025. “Right now, it is the so-called fanatics, not the skeptics, who have good reason to celebrate,” Sharma wrote. However, the recent rally is not driving up the value of wallets that much. In 2022, over four thousand wallet addresses reached the million-dollar threshold every day.
According to Kaiko, this could be because the inflow of new capital has not yet fully kicked in, or because long-term Bitcoin holders are selling as the token’s value increases.
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