Question 1

What is Pizza Day, and why did BTC hit an all-time high?

Accepted Answer

‘Pizza Day’, which falls on 23 May, is the 15th anniversary of when Bitcoin (BTC) was first used to make a purchase - in this case, 10,000 BTC for two pizzas. This year, BTC reached an all-time high of $111,814 on Pizza Day. However, the two events are likely unconnected, and the price rise can probably be attributed to President Trump’s new budget bill and institutional buying. You can read more about Pizza Day and the Bitcoin rally here.

Question 2

Are institutional investors responsible for BTC’s rise?

Accepted Answer

Yes. While it is clear that there is a strong retail demand for BTC, and cryptocurrency is still largely seen as ‘anti-establishment’, the latest record highs can be attributed to institutional investors. Data shows that some 225,000 BTC have been acquired by businesses, exchange-traded funds (ETFs) and governments since the start of the year. You can read more about the impact of institutional investors on the price of Bitcoin here.

Question 3

Are there any risks which could see BTC’s price fall?

Accepted Answer

BTC, like most cryptocurrencies, is incredibly volatile and heavily driven by market sentiment. Critics have specifically raised concerns around companies such as Michael Saylor’s Strategy, which is using debt to fund its Bitcoin buying spree. Long-term buyers should also be aware of the cyclical nature of BTC and how the price can swing wildly depending on when the next halving is happening.

Question 4

What is the halving, and why does it impact BTC’s price?

Accepted Answer

The halving process, which occurs every four years for BTC, sees the amount of new Bitcoin mined reduce the amount of new Bitcoin introduced via the miners on the network. This is necessary for security purposes, but it also makes it more difficult to mine the limited number of Bitcoins which are available. Historically, the price of BTC has been strongly tied to this cycle, dipping as it gets closer to the halving and rising in the months afterwards. You can read more about the impact of halving on the price of Bitcoin here.

About Ryan Brothwell

Market Insights analyses reviewed by Ryan Brothwell

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ETFs 36

Crypto 11

Forex/Futures 1

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