BTC holders sent its value to as low as sub-$38,000. Why is a cryptocurrency on the rise again?
Risk appetite is on the rise again. Investors are watching the markets adjust to sanctions against Russia. Oil-producing countries are considering the use of the Yuan to settle sales. China is thought to settle trades with Russia using its domestic electronic payment solution. More importantly, platforms like Coinbase (COIN) are not banning Russians from exchanging cryptocurrency.
Bears who bet on Bitcoin’s breakdown risk losses ahead. The market is assigning a value to Bitcoin. BTC is a viable means of exchange. As Bitcoin and other cryptocurrencies like Ethereum give people a viable alternative to paper currency, their value will not fall by much.
The U.S. dollar risks further weakening. After the central banks failed to raise rates by more than 25 basis points, its currency looks less attractive. Furthermore, the U.S. has a growing debt it cannot pay. Since it cannot defend the currency with higher rates, currency investors must embrace Bitcoin.
Bitcoin has an attractive store of value. Authorities cannot lock an owner’s digital assets. With Bitcoin, you own your keys. Governments cannot arbitrarily hurt the appeal of Bitcoin.
