Since the beginning of the year, Bitcoin has risen and dropped more than a few times. It began a long-awaited rise in early April and has been doing considerably well since then. A few days ago, the number one coin after struggling for a while, successfully went above $9000 to reach $9,381. This was a 7% jump that happened within a day and pushed the market cap to $165 billion. Bitcoin has sort of been in an upward trajectory since the bear market ended and a $165 billion market cap, 2019’s highest so far, is considerable proof.
In the past, we have looked at the many reasons why Bitcoin began its 2019 surge in the first place. Now, let’s consider the possible reasons Bitcoin rose past $9,000 and is currently still holding above the mark at the current price of $9,240.
The Upcoming Halving in May 2020
Currently, miners earn exactly 12.5 BTC every time a new block is produced. A halving event takes place after every 210,000 blocks which happen on average, every four years. The next one is expected to happen in May 2020 and will see block rewards drop from 12.5 BTC to 6.25 BTC and with the halving in sight, there are already a million one theories about its possible effect.
Since the natural laws of supply and demand dictate that prices surge in direct response to increased demand in the face of inadequate supply, we can definitely assume that Bitcoin’s value will keep rising significantly. Furthermore, history suggests that prices always rise around any halving event and is sometimes sustained past the event.
Bitcoin Sees Record Hash Rate
A hash rate is basically the measurement for mining speed and computation as it relates to producing blocks. It is the required effort or power for confirmation of transactions, ensuring network security. The previous all-time high was set in August 2018 and recently, a new record of 62246627 TH/s was set.
Also, the record for the second highest number of transactions was reached at 364,000. The highest is still 452,000 and was hit in May this year. This new records set with both hash rates and number of transactions definitely impacted the price as many experts have confirmed that hash rates and pricing have some association.
New Binance Restrictions
Binance, arguably the world’s largest cryptocurrency exchange, recently disclosed its decision to start a platform which will be based in the United States due to certain issues surrounding its legitimacy. However, before that is officially done, the firm announced that it will be enforcing certain limitations for all its customers who have U.S. passports whether or not they are based in the country. It is estimated that currently, as many as 30 million users will be unable to trade some cryptocurrencies including VET, NANO, AE, LINK, HOT amongst others. Popular cryptocurrency analyst Josh Rager has said that
“with the US Binance ban and other exchange delistings, people could be moving into Bitcoin and other major market cap coins.”
The Perfect Hedge
When Bitcoin successfully crossed the $8000 Mark, there were speculations and analysis which explained that one of the reasons for the surge was the ongoing trade war between the United States and China. Each country has set high tariffs on some of the other country’s goods ultimately making them a lot more pricey for the end customers. People in China, especially Chinese businessmen, have since been understandably afraid of the Chinese Yuan taking an unfavorable impact because of the disagreement. It is also assumed that more Chinese people are focusing on using Bitcoin as the perfect hedge since it still brings better returns than other assets in the global traditional markets.
It is expected that if bitcoin can keep up with its performance and can stabilize considerably above $8800, then the $10,000 mark will be more feasible.
- Source: First Appeared Here
- Published Time: 2019-06-20 16:37:13
The views and opinions expressed in the article A Look At The Possible Reasons Why Bitcoin Crossed $9,000 and Is Just Getting Warmed Up do not reflect that of 48coins, nor of its originally published source. Article does not constitute financial advice. Kindly proceed with caution and always do your own research.
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