Analysis by Fintek.pl editors The current year has brought the cryptocurrency market its biggest volatility since 2017. Monetary policy easing by the U.S. government has resulted in the recent widening of bitcoin investors despite everything. A lot of turmoil was to be caused by the May halving of bitcoin, in which analysts and investors placed a lot of hopes. So far there is no big increase in the price of BTC, but the past shows that we will have to wait for a while. The year 2020 is not very kind to the global economy. Supply chain disruptions, lockdown-related outages, falling consumption - all of these are likely to leave their mark on the global economy sooner or later. What impact have these events had on the cryptocurrency market? Before we move on to consider this topic, it is worth getting acquainted with the definitions of the phenomena described later in the article. Monetary policy easing - increasing the supply of money in circulation. Instrument used by central banks, when interest rates are close to zero. Popularly known as "printing money". Halving bitcoin - cutting the mining reward in half. If before halving for adding a new block of information to the database, miners received 12.5 bitcoin, so now the reward is 6.25 BTC. Currency fluctuations highest since 2017 Certainly, to invest in cryptocurrencies at the current time is not encouraged by fluctuations in the exchange rate of bitcoin reaching the largest scale since 2017. The maximum value of the asset amounted to $ 9 thousand in the current year. In turn, during the declines, this indicator strongly approached the level of 4 thousand USD. The cryptocurrency market is characterized by very large fluctuations in the exchange rate, so investments in this type of asset are recommended for people who already have some experience in the financial market. It is necessary to know which cryptocurrency to invest in, which exchange to use and when to dispose of one's crypto assets," says Rafał Tomaszewski, editor of Fintek.pl Monetary easing has worked out well for bitcoin Bitcoin's recent rebound was probably indirectly triggered by the U.S. central bank and its easing of monetary policy in the country in an attempt to protect the economy from the negative impact of a pandemic. The US example was followed by some of the world's central banks. This situation has pushed some investors to invest their funds in bitcoin, in order to prevent potential declines in the value of the currency. The intensification of the investment movement can already be seen on cryptocurrency platforms such as Binance or MyEtherWallet. The value of BTC as a currency with a finite number of tokens is susceptible to increases in a situation of growing demand and shrinking supply. Especially as the number of bitcoins remaining to be "dug up" is shrinking by the day. Thus, experts predict that increased investment in the currency should bring an increase in its price. Bitcoin remains a highly speculative asset that has so far benefited from the crises of the "old" system. I would not look for a direct impact of the epidemic itself on the BTC exchange rate. Rather, the cryptocurrency exchange rate is rising because of the recent halving and central banks' actions on the economic crisis. The rampant printing of fiat currencies makes BTC, whose supply is determined by an algorithm, an interesting investment in the eyes of investors," comments Marcin Wenus, Editor-in-Chief of Comparic.pl, President of Invest Cuffs Foundation. May bitcoin halving On May 11 at 21.00 Polish time bitcoin halving occurred. Miners are now receiving 6.25 bitcoins per block, compared to 12.5 previously, meaning that twice as much computing power is needed to produce the same value. At a time when central banks are printing money en masse for fear that their operating currency will fall in value against the dollar, actions such as halving bitcoin makes it a good investment direction. The finiteness of BTC reserves and regular halving of the currency are two of the most important mechanisms protecting it from inflation. We know from history that inflation affects traditional currencies mainly in times of crisis, exactly such as the one the global economy is currently facing. However, the hopes of cryptocurrency investors related to halving were somewhat dashed. A few days before the event, bitcoin's exchange rate hit $10,000 for the first time since February - probably on a wave of enthusiasm. The day before the halving, however, the bitcoin price fell to $8.5 thousand, while the day after it was valued at $8.7 thousand. It should be remembered that with previous rewards halving, clear jumps in exchange rates occurred only after several months, so everything indicates that the biggest increases are yet to come. According to the assumption, halving is done in order to protect bitcoin resources from depletion, but in the current situation it can be an ideal stimulus for the growth of BTC - comments Rafal Tomaszew
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