The bitcoin has increased its value again, surpassing Monday the $20,000 barrier for the first time since November 2022. The most popular and largest cryptocurrency in the world by market capitalization (more than ethereum) seems to be experiencing a renaissance this January.
But why is bitcoin going up? Experts believe that the market for cryptocurrencies it may have risen in anticipation of a possible pause in rate hikes by the Federal Reserve in the United States, after a modest drop in inflation in December.
Inflation has already affected the capital market, the gold and to bitcoin. However, the institutionalization of bitcoin and the series of measures taken by the Federal Reserve last year may have favored this cryptocurrency, experts say.
Analysts are also bullish on bitcoin in anticipation of the so-called “halving event” in 2024. Every four years, payments to Bitcoin miners are cut in half. And therefore the supply is also reduced, which favors the growth of the price of Bitcoin.
Bitcoin price growth after a fateful 2022
The bitcoin market value plummeted nearly 65% in 2022, dragged down by a series of bad events including the Luna collapse, the FTX bankruptcy and fears of global macroeconomic turmoil took their toll on the crypto market.
The rise in the price of Bitcoin can also be attributed to factors such as limited supply, speculation, market sentiment and interest from institutional investors, several experts explain.
“It is important to note that the cryptocurrency market is highly speculative, and the price of Bitcoin can fluctuate significantly.“, so it is difficult to predict the future price movements of Bitcoin and other crypto assets, they reason.
The speculative base of bitcoin, and the rest of cryptocurrencies such as ethereum, make it unpredictable to make a real prediction of the future of these values. The war in Ukraine may affect bitcoin for better or worse, nobody knows. That is why it crashed in the hardest part of the crisis and the next day we see how it recovers slightly.