Bitcoin jumped to reach the price of $ 9,700, on its way to surpassing the $ 10,000 level, in light of the increasing demand for its purchase, and analysts noted that the cryptocurrency broke its short-term link with the Standard & Poor’s 500 Index, after Federal Reserve Chairman Jerome Powell’s comments on expectations Instead, the price of Bitcoin rose along with rival gold, which acts as a safe haven in the markets.
Bitcoin added about $10 billion to its market value after Powell's bleak comments on the economy due to the coronavirus pandemic.
Many believe that Bitcoin's gains have something to do with US President Donald Trump's call for the Reserve Bank to make interest rates negative, as well as Federal Reserve Chairman Jerome Powell's pessimistic statements about the US economy.
According to many of the crypto community, unconventional monetary policies such as negative interest rates are inflationary in nature, and they see Bitcoin as a hedging nature against inflation, and thus has an ideal opportunity to attract more investment XM Arabia From institutional investors when the world's largest economy gravitates toward such inflationary moves.
Monetary easing vs. quantitative tightening
Bitcoin appears to have performed very well over the past two months, rising around 150% from its March 13th low of $3,800, as the currency is rallying bullish momentum and heading to cross the $10,000 mark amid high sentiment among crypto investors, and with high expectations That the rise is not over yet.
Leading investors believe that a Bitcoin breakout to $20,000 by the end of the year is entirely possible, based on massive amounts of fiscal and monetary stimulus by world governments and central banks. Quantity exists all over the world and not only in the US and is offset by a quantitative tightening of the Bitcoin halving event, a sign that it is a rare asset.
Technically, crypto traders have pointed out that Bitcoin’s weekly price action looks like it did at the start of the 2019 bull run, meaning that if history repeats itself the cryptocurrency could hit $20,000 towards the end of the year.
Bitcoin and the halving event is different from the previous two halvings
Bitcoin has grown by around 28,00% since the last halving, but the scene for the current halving is very different from the two previous times. trade Bitcoin in 2020 is more than 28,00% higher than in 2016, massive growth in volume is evidence of greater adoption of the currency in the last four years, but if we do a similar price comparison, the price of Bitcoin in mid-2016 before the second halving was hovering around $650 and today the price is up around 1240% and hovering around the $8,700 level before the halving.
In addition to large trading volumes and transactions, we also find a significant increase in the number of cryptocurrency users, in the second half there were about 3 million users registered with Coinbase, today more than 30 million users of the same exchange.
The explosive growth of transaction volumes and user numbers are positive indicators of the overall growth of the Bitcoin network, which will have a strong impact on prices in the long run.
However, not all factors play a positive role enough, the state of the global economy in 2020 is very different from 2012 or 2016. The outbreak of the Corona virus has put global economies in a state of great turmoil, which may affect emerging asset classes such as Bitcoin, the scene today is different Exactly what it was four years ago.
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