On April 30, bitcoin rose to $ 9,400 and became the leading asset in terms of profitability in 2020. Now the first cryptocurrency is trading at around $ 9,200. What is the reason for the growth of bitcoin and for how long, ForkLog learned from experts.
There is no single reason for the growth of the BTC rate. But in general, the news flow and what is happening on global capital markets contribute to the increase in the value of the flagship cryptocurrency, and here's why.
Firstly, BTC halving is approaching, that is, the reward for mining each block will decrease. The daily production of BTC will also be reduced, which may contribute to an increase in the price of digital money.
Secondly, the US Federal Reserve, whose meeting ended the day before, noted the facts of a serious economic contraction and warned of its readiness to introduce new measures of economic support. Most likely, we are talking about new packages of supporting measures, that is, the Fed will again “turn on the printing press”. The possibility of increasing the money supply in the United States, in addition to the existing parameters, could stimulate investors to seek profitability in another place, which became the cryptocurrency market.
With all this, it’s absolutely impossible to say that the cryptocurrency sector is becoming a “safe haven” for fiat money - the last four months have perfectly demonstrated this.
Max Krupyshev, CEO of CryptoProcessing:
We approach the halving, there was a push from lovers of quick profit. Other investors who emerged from falling assets in March are prepared to take risks and invest in alternative finance. Bitcoin gave a signal, they supported.
Gregory Klumov, founder of the stable cryptocurrency platform Stasis.net:
The failure in mid-March was caused by the elimination of early halving positioning. Then the coronavirus and the short-term liquidity shortage took the investors by surprise. Since then, liquidity has been sealed up to $ 12 trillion worldwide. All boats rise to the places where they were supposed to stand a month ago.
Anatoly Knyazev, Executive Director of EXANTE:
The price of bitcoin is growing amid expectations of a halving and general positive in the stock market. Investors are actively entering the market: the total trading volume has increased significantly, in particular, for BTC it reached $ 70 billion, which is comparable to the volumes on March 12-13, when the price of bitcoin fell almost twice in 12 hours. However, do not relax: on the eve of halving, the wildest price movements are possible.
Sergey Troshin, CEO of Six Nines data center:
Bitcoin and the entire cryptocurrency market after it began to grow at Halving-FOMO. Less than two weeks are left before halving the bitcoin network. Some relief in the global financial market has put halving back in the spotlight of investors.
The majority of market participants believe that halving carries an extremely positive message for the first cryptocurrency. However, there are those who think that halving is already included in the price of bitcoin, and the main purchases occurred immediately after the market collapse in mid-March.
CoinMarketCap data showed that over the past 24 hours the Bitcoin network recorded a historical maximum trading volume of $ 69.5 billion. For comparison, in 2017, at a price of about $ 20K, trading volumes barely exceeded $ 20 billion. Such a surge in volumes when the price increases further strengthens growth .
Nevertheless, it is already evident that the first impressive impulse of purchases is running out. There is nothing surprising here, since sharp price spikes cannot do without temporary corrections. The ability of Bitcoin to exceed the most important psychological round level of $ 10 thousand will largely determine the future dynamics.
Nice summary