The Strategist

Investors are leaving US dollar for Bitcoin, cryptocurrency on the rise


10/14/2020 - 05:02



Bitcoin rate returned to the marks of one and a half months ago, exceeding $ 11.7 thousand. Over the week, the most famous cryptocurrency has added almost 8% in price.



pixabay
pixabay
The bitcoin rate renewed its 1.5-month high on October 13. According to Bloomberg, at the beginning of the day, the value of the most popular virtual currency rose by 1.4% compared to the close of the previous day, to $ 11.73 thousand, the highest value since September 2. However, there was not enough strength to continue the game to increase, and later the rate had stabilized near the $ 11.4 thousand mark. Even taking into account this correction, the rate increased by almost 8% in seven days. The second most popular cryptocurrency in the world, Ethereum, has risen in price by 12% over the week, to $ 380.

The confident recovery in virtual currencies quotes took place against the backdrop of the weakening of the dollar. Over the past three weeks, the DXY index (the US dollar exchange rate against six leading world currencies) has decreased by 1.7% and returned to the level of 93 points, and on October 13, won back a small part of the lost positions, reaching 93.4 points. The weakening of the American currency occurs against the expectations of the expansion of the monetary stimulus program in the United States. On October 9, the White House almost doubled the size of the proposal, increasing it to $ 1.8 trillion.

In such an environment, it should come as no surprise that institutional investors are starting to take an increasing interest in digital currencies. In September, the American software provider Microstrategy converted all the cash on its balance sheet in the amount of $ 425 million into Bitcoin. On October 8 it became known that Square of Twitter co-founder Jack Dorsey invested $ 50 million of its own funds in Bitcoin, and on October 13 there were reports that Stone Ridge was buying $ 115 million worth of bitcoins.

The “bullish” momentum is still supported by the third halving (the process of dividing the number of generated rewards for mining a block in half), which took place back in May, according to market participants. This move led to a halving of the miner's reward for producing bitcoin to $ 7,000.

Various legislative initiatives to legalize the tokens of various cryptocurrency and blockchain projects will have a general impact on the market. In addition, news of large investments in crypto assets from large companies and investors will also contribute to the rise in the value of bitcoin. Of great importance for the market will be the development of the situation around the second-largest crypto-derivatives exchange BitMEX in terms of trading volumes, the owners of which were under investigation in the United States.

source: bloomberg.com, dowjones.com




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