Why Bitcoin is Increasing (Why Bitcoin is Soaring)

Why Bitcoin is increasing. After reaching a historic high in November 2017, Bitcoin experienced multiple major drops and bear markets. However, it seems that the market has now started to realize the importance of Bitcoin’s increase: “Why is the price of Bitcoin so high? There are two reasons.”

1. Increase in global money supply leading to inflation;

2. Decreased demand for stablecoin USD.

3. Severe congestion in the Bitcoin network.

4. Chairman of the U.S. Securities and Exchange Commission, Gary Gensler, warned, “Due to the outbreak of the COVID-19 pandemic, the U.S. economy has been severely affected.”

5. Increased demand for BTC from institutional investors.

6. Discussions in the crypto community: Can Ethereum 2.0, Bitcoin Cash, and other DeFi tokens become mainstream? Why is Bitcoin increasing? “Why” is Bitcoin increasing? “Why?” Why is the Bitcoin bull market continuing? Why is the Bitcoin bull market hitting new lows for three consecutive weekends? Why is Bitcoin increasing? On October 12th, around 1am, Bitcoin suddenly surged from a high of $9,300 to around $9,700 (currently still not breaking 9,500 points). As of the time of writing, Bitcoin is temporarily priced at $9,600, with a 24-hour increase of up to 11.8%. (Mars Finance)

Why Bitcoin is Soaring

Today, the price of Bitcoin has soared, rising from $54,000 to the $63,000 level. Within the past 24 hours, there have been 11 cryptocurrencies with an increase of over 8%: Litecoin, Ethereum, and EOS. Other cryptocurrencies have also experienced varying degrees of uptrends, with XRP performing the best. ADA has followed BTC’s rise.

The main reason behind this rally is the U.S. government imposing new taxes on cryptocurrency transactions — if these taxes are confiscated, investors will turn to Bitcoin investments because they can make money from it. Therefore, when regulatory agencies start viewing digital assets as a legitimate form of property, people may buy or sell them, thus pushing the market toward a more regulated development track.

The reason for this recent plunge is that the chairman of global central banks, Powell, recently stated, “With Federal Reserve Chairman Jerome Powell announcing the strengthening of control over the stablecoin industry, we expect more funds to flow into this field in the future.”

In addition, Musk revealed that he already holds some Tesla stocks, but there is currently no evidence to suggest that he owns all of them. Furthermore, Tesla’s CEO, Elon Musk, previously stated that “Tesla will not put all of its cash on the blockchain,” and pointed out that Bitcoin may become a means for its company’s long-term savings.

Whether this surge in Bitcoin is due to Musk’s belief that Tesla is considering expanding its balance sheet by more than 10 times, or because he posted an article on Twitter saying, “I am indeed optimistic about Bitcoin,” the question becomes a fact that Tesla currently does not intend to accept Bitcoin as a payment method, but instead chooses to continue using the platform.

However, Musk recently publicly admitted that Bitcoin is a security and emphasized that Bitcoin is not a commodity.

According to CoinMarketCap data, as of the time of writing, Bitcoin’s total market value has reached approximately $2 trillion, reaching a historic high. In the week of December 25th, 2020, Bitcoin’s spot price was $4,190. Compared to the high point of $32,500 last Friday night, it has fallen by nearly 70%.

It is worth noting that over the weekend, Bitcoin briefly touched the $10,000 mark, but then fell below $10,000 again. However, in the early morning today, Bitcoin returned above $10,000 and quickly rebounded below $12,000 after breaking through the $10,000 integer mark. Since the beginning of January, it has been in a consolidation phase until this Wednesday when it eased. Despite this, Bitcoin has maintained a relatively strong price level since the beginning of this year. From the end of 2018 until now, the price has remained at a low level but experienced a significant decline before the end of 2020.