What is the reason for the continued surge in bitcoin since May?

Since the beginning of 2018, Bitcoin has been in a downturn, and it has started a downward trend of more than a year. However, since the beginning of 2019, the trend of Bitcoin has begun to show a completely different trend. This wave of bitcoin has gradually warmed up, and many groups have begun to discuss the pressure support level enthusiastically, but the fact is that this wave of action is beyond the expectations of most people. Many people predict that 6000 points, 6400 points, 6800 points and so on. However, they broke through, and Bitcoin rushed to a high of $7,500 in just a few days, which made the early summer currency market re-fire.

This wave of movement seems to make people see the arrival of the bitcoin bull market, but such a strong trend has also made many people puzzled. Where did the strong rise come from? What are the deeper reasons behind it, let us briefly talk about the reasons why bitcoin has continued to skyrocket since April and May.

The downturn in Bitcoin has been going on for a long time. From the high level at the end of 2017, the trend of Bitcoin has been continually fluctuating but the general direction of the downtrend. However, it is clear that Bitcoin has slowly increased since the beginning of 2019, and there has been a very significant explosive growth since April. The chart below shows a strong pull since May, with the highest point breaking through $7,500.

The author also sorted out several reasons that may cause the recent price hikes:

1. Bitcoin is halved soon

Judging from the setting of Bitcoin itself, the reduction of production every four years will definitely bring about a wave of currency price changes, and watching each production cut will lead to a rise in the price of the currency.

Bitcoin halving schedule:

November 28, 2012: 50 bitcoins → 25 bitcoins

July 9, 2016: 25 bitcoins → 12.5 bitcoins

Conducted in April or May 2020: 12.5 bitcoins → 6.25 bitcoins

2024: 6.25 bitcoins → 3.125 bitcoins

And the price of the currency brought in by half each time will have a wave of rising, as shown below

It can be seen from the halving table that the next halving is just about 11 months later, such heavyweight news will naturally not be ignored by investors, and it is well known that the longer the investment cycle, the greater the potential benefits, so Investors have entered the market one year before the fork, and it is now possible that the coin has risen.

2. The rate of return has reached a new high, and the confidence of capital in bitcoin has increased.

At the just-concluded Berkshire Hathaway shareholders annual meeting, someone asked Warren Buffett about Bitcoin, and the stock gods continued to give his own conclusions: "This is a gamble." There is a lot of fraud related to it. Bitcoin does not produce any value." He added, "It can't do anything. It's there. It's like a shell, it's not an investment for me. ”

But even if the stock gods are still opposed, it does not prevent many traditional investors from entering the digital cryptocurrency market. According to Bloomberg News, Fidelity, the world's largest asset management company, officially entered the field of investing in Bitcoin in early May. And the bitcoin mining industry has been laid out.

According to relevant data, the two-year return: Standard & Poor's 500 Index: 19.9%. Gold: 1.3%. Oil: 31%. Bitcoin: 457%. The return on investment is so high that traditional financial predators cannot ignore it.

3. The good news of the gradual release of ETF

In addition to the two bills on virtual currency discussed in the US Congress in January, the Bitcoin Futures ETF has returned to people's horizons. According to US media reports, the SEC has received an application for the Bitcoin ETF for the third time on May 11. It is reported that the SEC's willingness to approve the ETF is still not strong. However, because there is a chance of trial, it still injects a booster into the market.

4.USDT risk

Bloomberg reported that a spokesperson for the New York City Attorney General's Office said that the Bitfinex exchange, which is inextricably linked with USDT, had directly misappropriated the USDT to fill the gap of $850 million. Directly caused the USDT currency to cause a 4% fluctuation. For an anchored digital cryptocurrency, a 4% volatility could lead to complete dishonesty in the market. Therefore, a large number of users holding USDT have abandoned the USDT and turned their assets into the BTC to hedge.

5. Trump decided to increase China's tariffs

This is also the most exciting news and the most important news recently. The impact on the cryptocurrency market is very significant. US President Trump decided to increase the number of Chinese exports to the United States from 10% to 25%. This will be a devastating blow to China's export industry and will have a very serious impact on the Chinese economy. The domestic stock market has therefore plunged. Some of the hot money drawn from the stock market has entered the cryptocurrency market. This also promoted Bitcoin itself. The picture below shows the overall decline in domestic stock markets.

In summary, this is the reason why the author analyzes the arrival of this little bull market. Dear friends, welcome to leave your thoughts and communicate with us.

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Author: Nanjing Block Chaining

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