- The bullish market sentiment, as well as daily news reports highlighting its growing acceptability, are instilling optimism in the market.
- Stock exchanges, brokerages, and banks have been prepared for what is about to happen: the crypto market will expand, and demand will be met.
- If the Federal Reserve’s timeline is shifted due to the delta variant, Bitcoin may benefit.
The Bitcoin surge has returned after months of being stifled by a wary market. This fresh surge in digital currencies is being driven by two factors: an upward perspective of the market and daily news reports that are optimistic about its acceptability.
On Monday, Bitcoin soared beyond the $50,000 barrier for the first time since May’s lows, while the prices of other cryptocurrencies like as Cardano ADA, Ethereum, Dogecoin, and IDA all improved. This occurred as the number of people infected with the delta version of COVID-19 in the United States continued to rise. As a result, the Federal Reserve’s interest rate policy normalization schedule could be shifted. If so, Bitcoin could respond favorably.
According to Oanda analyst Edward Moya, everything hinges on Federal Reserve Chairman Jerome Powell’s address at the Jackson Hole conference on Friday.
Investors will be watching the event for hints as to when and how the Fed’s treasury purchases will begin to reduce.
Were the BTC Crash Predictions Wrong?
Many people predicted that Bitcoin would fall to new lows, but they were mistaken. In May, the coin touched a low of $29,800. The analysis was based on cryptocurrency’s long history of high volatility and speculation.
Instead, the market consensus appears to be that Bitcoin will continue to increase. The picture seems brighter with BTC joining the big leagues of US finance courtesy to the Senate Infrastructure Bill, support from fintech like PayPal (NASDAQ:PYPL) and several banks, as well as insurance behemoths.
Miners are considering relocating to the United States as a result of the Chinese government’s recent persecution. From a legal and energy standpoint, the country provides better mining conditions.
Jonathan Cheesman, FTX‘s Head of Institutional and OTC Sales, told Bloomberg on Monday that “there has been an accelerated pace of crypto asset accumulation in recent months.” “Institutional movements in Bitcoin and Ether, as well as a lot of retail activity in NFT and gaming, are all likely to play a role,” he added.
“What he should know, is that being long bitcoin is the best method to sell financial assets,” Cheesman remarked on Sunday 22nd in a tweet from his own account. Bitcoin acceptance is being fueled by extreme central bank easing.” Cheesman was alluding to hedge fund manager Michael Burry’s long-term Treasury wager.
What Can We Expect?
When crypto prices climb, the market’s confidence returns, especially when the whales sing and announce large acquisitions. The rise, on the other hand, might be simply another example of the manipulation to which we have become used.
How similar is the present situation to Elon Musk’s story, in which he saw Bitcoin as a way to offset Tesla’s losses? In mid-April, BTC prices soared above $64,000. Tesla (NASDAQ:TSLA) profited $272 million after selling its crypto assets at the end of March (59 percent ).
BTC lost around 25% of its value in a week as a result of Musk’s subsequent statements against mining and its environmental effect. Tesla CEO Elon Musk, on the other hand, has been making remarks that appear to promote Bitcoin since late July.
Musk has indicated that he owns cryptocurrency assets (Bitcoin, Ethereum, and Dogecoin) and that he wants crypto to flourish.
Cathie Wood, the founder, CEO, and CIO of Ark Invest, is another important player in the industry who predicts bright days for cryptocurrencies.
The investor projected that Bitcoin will reach $500,000 in an interview with Bloomberg TV. She even advised businesses to consider include BTC in their financial statements.
Hash rate (a unit of measurement of the processing power in Bitcoin) has been a topic of discussion among experts over the past month or so. Millions of dedicated computers were shut down as a result of the BTC prohibition and Chinese crackdown on mining. Before the prohibition, China accounted for about 65 percent of BTC mining.