Cryptocurrencies have embarked on the rise of Bitcoin, generating a huge appreciation in market capitalization
While central banks are willing to do their best to keep the economy moving, the cryptocurrency market has skyrocketed more than $ 35 billion in market value in less than 24 hours.
Yes, you read correctly. A single Bitcoin reached a high of $ 9,388.30 in the U.S. – the highest level since March 7 – before settling at $ 8,633.54 at the time of this publication. A week ago, it was $ 7,472.
What made it happen
CNBC report that cause and effect are linked to central bank monetary policy, as well as to an upcoming event known as Bitcoin halving:
“The new Bitcoins go into circulation as block rewards, produced by‘ miners ’who use expensive electronic equipment to earn or‘ mine ’. Every 210,000 blocks, or approximately every four years, the total number of Bitcoin that miners can potentially win is halved. ”
Obviously, with the number of Bitcoins entering the supply chain being cut in half, it is reasonable to expect the value of the digital currency to rise.
As for the reason for monetary policy, the main central banks – institutions that manage money, interest rates and money supply – around the world have enjoyed generous stimulus packages to ease the economic repercussions caused by the pandemic. CNBC reports that these institutions have said they are willing to go further, if necessary.
“This was a factor behind the recent rise in the stock exchanges in the past few days and has spread through Bitcoin and other cryptocurrencies,” noted Arjun Kharpal of CNBC.
Regulators’ action, coupled with Bitcoin halving, could help bolster the economy. Vijay Ayyar, head of business development at cryptocurrency exchange Luno, told CNBC that cryptocurrencies may receive a lot of attention in the near future.
“My sense is that markets in general are not reflecting the reality on the ground, but this is also the result of the Fed in the US being extremely clear that they will do anything to ensure economic stability,” said Ayyar.
“We could see a lot of money flowing into stocks and cryptocurrencies as well, as a result of the new printing of money.”