So far, this year has been a big one for Bitcoin: after a spectacular price crash in March, BTC managed to hold levels between $8,500 and $9,800 for nearly three months, occasionally kissing $10,000. Never before had Bitcoin managed to sustain something so close to $10,000 for such a long time.
Now, however, it seems as though $10,000 may be in Bitcoin’s rearview mirror for some time to come: on Monday, July 27th, Bitcoin broke past the $10,000 marker and hasn’t looked back since.
In fact, Bitcoin’s now seems to be courting the $12k resistance level. Since Tuesday, July 28th, Bitcoin has been dancing between $11,200 and $11,800 and has occasionally reached alllllllmost up to $12k (according to CoinMarketCap), or even past it (on certain exchanges). Now, some analysts are identifying $50k as Bitcoin’s next major target.
What’s driving this latest bull run? Will Bitcoin keep up its momentum, or will BTC once again fall below $10k?
Bitcoin may be benefitting from global economic instability
Many experts within the cryptocurrency space seem to agree that there are several main factors that are pushing BTC upward: primarily among these, however, is global economic instability.
Indeed, Marie Tatibouet, chief marketing officer at cryptocurrency exchange Gate.io, told Finance Magnates that the price of Bitcoin may have been boosted by “the current situation of the world.”
This includes “the instability caused by the pandemic, the stock market falling, the US and China market wrestling ‘dollar vs. yuan’, or a big fear of inflation on a global scale, just to highlight some,” she said.
Indeed, the economic turmoil that has resulted from the global pandemic has also caused people to reconsider their beliefs about their national currencies, a factor that could also be contributing to Bitcoin’s ascent.
For example, Evan Bayless, the operator of WhatIsMoney.info, also pointed out to Finance Magnates that “we as a society are very accustomed to looking at the value of everything in terms of our national currencies: we think that dollars and other major fiat currencies are stable,” he said.
The public’s relationship to major world fiat currencies seems to be changing
However, “the incredibly fast and drastic response of the Fed and other central banks to the COVID-induced lockdowns (and the subsequent economic fallout) has caused the idea that fiat currencies may not be a consistent yardstick for measuring value to begin to enter the public consciousness,” he said.
In other words, the massive amount of quantitative easing that the United States central bank decided to do earlier in the year seems to have shaken the public perception of the almighty dollar and other major fiat currencies.
Therefore, Bitcoin may be capitalizing off of its functionality as an inherently scarce…