Why the Bitcoin Rally continues for the time being
The cyber currency Bitcoin is about to cost more than 9000 dollars again. Institutional investors in the market are driving prices.
The price of the crypto currency is rising again.
The Bitcoin Rally continues. The oldest and most important crypto currency increased in price on Monday around well ten per cent and was also in the point 8957.70 dollar as expensive as last one year ago. Other major virtual currencies also gained. According to data from the analysis company Coinmarketcap, the increase for Ethereum and Ripple (XRP) was around seven percent, for Bitcoin Cash even more than eight percent.
“The comparatively low trading volume over the weekend may have triggered the rally. Explosive price movements are then quickly possible,” explained market analyst Timo Emden of Emden Research.
Bitcoin also continues to benefit from speculation that institutional investors will increase their exposure to the crypto market, especially in south america. The large US asset manager Fidelity recently announced that it would offer its clients Bitcoin and Co. trading. Fidelity has been offering a corresponding custody solution since autumn.
“In addition, Bitcoin is gradually gaining acceptance in the US retail sector,” argues Emden. The driving force behind the recent bull market was reports from the USA that Facebook was planning its own crypto currency. With it, the world’s largest social network could quickly advance into the league of payment service providers.
The traditional banks are already arming themselves for the new competition. JP Morgan, a major US bank, is working on its own JPM coin. Deutsche Bank and other institutions, including UBS and Santander and Barclays, are apparently working on a competing network with the project name Fnality. A newly developed utility settlement coin (USC) is to be used.
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Bitcoin “mining rights” to be halved again soon
Observers, however, also constitute another driving force for the current bull market. So let the so-called halving cast its shadows ahead in the coming year. Every four years, the number of bitcoins that so-called prospectors can win within a certain period of time is halved. The unknown inventor or inventors of the crypto currency want to prevent inflation. A maximum of 21 million Bitcoin can be put into circulation. Currently there are about 17.7 million.
Bitcoin “miners” provide computing power to encrypt and verify transactions in the crypto currency. As a reward they receive Bitcoin.
“In the past, too, there were major price rallies around a year before the halving dates. Price fantasies currently seem to have few limits,” concludes analyst Emden. If the upward momentum continues, even the 10,000 dollar mark could come into view again. However: “The danger of major setbacks remains acute. The cyber currency tends to run hot. Profit taking is not uncommon then.”