Recently, Bitcoin has once again staged a roller coaster market.
Affected by the US Taxation Bureau's education letters to cryptocurrency traders and the hearing of Libra, the virtual cryptocurrency of social giant Facebook held in the US House of Representatives, bitcoin prices once fell below $10,000 and fell 30% in a week. However, due to information such as the Fed’s interest rate cut and the RMB exchange rate breaking 7, the bitcoin rose for two consecutive days, and on August 6 it broke through $12,000.
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The non-small market for cryptocurrency data shows that as of 15:00 on August 6, the unit price of Bitcoin reached US$12,258, breaking through US$12,000 in one fell swoop, with a 24-hour increase of approximately 5.42% and an overall market capitalization of US$218.6 billion. The data shows that in the past 7 days, bitcoin prices rose by 29.09%; in the past three months, bitcoin prices rose by 108.86%; in the past six months, bitcoin prices soared by 257.76%.
As bitcoin prices continue to rise, the market value of the entire bitcoin has also reached a new high in the overall market value of virtual currency. According to CoinMarketCap, a cryptocurrency data website, the total market value of 2,426 cryptocurrencies currently included exceeds $318 billion, with bitcoin market share accounting for 68.5%, the highest since April 2017.
Although bitcoin prices have skyrocketed in the past two days. But in early July, Bitcoin only plunged 30% in the week. The non-small market for cryptocurrency websites shows that at 22 o'clock on July 10, the price of bitcoin broke through $13,000 in one fell swoop to reach $13051. But shortly thereafter, at 20 o'clock on July 17, the unit price of Bitcoin has fallen to $9,183. This week, Bitcoin fell nearly 30%.
Why has Bitcoin soared in the past two days? Various data indicate that this is related to factors such as the recent Fed rate cut, RMB exchange rate fluctuations against the US dollar and safe-haven demand.
On July 31, 2019, the Fed cut interest rates by 25 basis points. The global market reaction was abnormal and fierce. After two days of interest rate cuts, European and American stock markets fell sharply in the past two days, causing global stock markets to fall. On August 5th, the spot exchange rate of the RMB against the US dollar, which reflects the expected exchange rate of the market, broke the “7”. This is the first time that the RMB exchange rate has penetrated this barrier in the onshore market for 11 years. And almost at the same time, bitcoin is jumping sharply. The non-small market shows that at around 7:00 on August 5, the price of Bitcoin stayed around $10,927, but then it rose sharply. On August 6, it rose in a straight line until it broke through $12,000.
Bitcoin or a safe haven
According to the foreign cryptocurrency data website cointelegraph, Jeremy Allaire, chief executive of the encryption payment company Circle, said that macroeconomic turmoil is the reason for the recent growth of Bitcoin (BTC).
In an interview with CNBC on August 5, Allaire believed that Bitcoin has become a safe haven for storing wealth during geopolitical and macroeconomic turmoil. Allaire said there is a correlation between recent bitcoin gains and the RMB exchange rate, which has just hit an 11-year low.
In addition, the legalization of Iranian Bitcoin mining has also brought positive benefits to Bitcoin. According to PRESS TV, on August 4, a bill approved and published by the Iranian cabinet stated that the government did not recognize any legal activity involving illegal encryption procedures in Iran. It stated that the government and the banking system would not treat digital currency as legal tender and the Iranian Central Bank would not guarantee its value. However, the bill states that under certain conditions it is allowed to mine digital currency (mining) in Iranian territory, for example if miners are approved by the Iranian Ministry of Industry and do not mine digital currency within 30 km of all provincial centres. In addition, the bill states that mines will be taxed like industrial manufacturing units; if foreigners want to establish mining farms in these areas, the Iranian Ministry of Industry is free to delegate authority to the SEZ authorities.
Bitcoin prices have fluctuated drastically, and many of the world's giants are eager to try on virtual digital currencies. According to media reports, Philippe Simonnot, a French economist, recently said: "There are some new things, such as Bitcoin and Libra, and these two digital currencies have many shortcomings, such as The large fluctuations in the value of Bitcoin, Libra has the nature of private money, etc., but their emergence is a manifestation of the chaos of today's monetary system, reflecting people's distrust of this system, and the more simple, free from political uncertainty. The huge demand for healthy and international currencies. These digital currencies have brought new enlightenment and challenges to the globalization of the renminbi and the reform and management of the future monetary system. It is necessary to strengthen discussion and research in Europe, the Middle East and the world."
Article from: Daily Economic News
Every reporter Liu Yongsheng edited Liao Dan