The shortage of dollars in the financial market. The enormous volatility of the British pound. The tighter regulation of the European Union’s cryptocurrencies. These points are just a few of the recent developments that may have affected the value of the main digital coin Bitcoin.
Bitcoin as an unstable position
Bitcoin has been in an extremely unstable position since early autumn starting early September at $9536. Six days later the coin reached its monthly peak of $10,896. Then the asset rate began to decline. The last day of the month BTC showed the minimum monthly price of $7833. In early October it seemed that the situation was improving.
The first cryptocurrency rose above $8323. Then it overcame the figure of $8557. However, the coin failed to hold this position for a long time. Economic and political world events may have caused sharp fluctuations in the exchange rate of the first cryptocurrency.
United States of America
In mid-September, the U.S. Federal Reserve increased its cash supply by providing banks with additional liquidity of $278.2 billion. This came after the so-called “nightly repurchase transaction”. The Central bank tried to ease the pressure on the markets by buying treasuries and other securities.
This is in order to “pump” money into the system and prevent an increase in borrowing costs above the Fed’s target range. After CNN’s publication appeared, the state’s budget had more and more new dollars. This was literally from the air. It would seem, how does this apply to Bitcoin?
The Libra project from Facebook had an indirect impact on the course of the first cryptocurrency. It also had a direct impact on the behavior of European regulators. At the end of September, Sointelegraph published a statement by German Finance Minister Olaf Scholz. He said that the key element of state sovereignty is the issue of currency. It means that the country’s authorities will not give it to private companies.
It was an explanation of why Angela Merkel’s office approved a new blockchain strategy. The main purpose of this is to prevent the excessive development of stablecoins in the country. Authorities fear that digital assets may become a viable alternative to public currencies. An interesting coincidence is that the day after the German blockchain strategy was approved, the rate of the first cryptocurrency fell sharply from $10,217 to $9869.
French Finance Minister Bruno Le Mayor also believes that Libra is threatening the financial sovereignty of different countries. At the same time, he sees the benefit of the cryptocurrency. He also believes that it is necessary to create a public digital coin. This will become a weapon against the asset from Facebook.
The rise in the cost of Bitcoin in early September was also attributed to the weakening of the Chinese yuan. The first cryptocurrency became a risk hedging instrument for many Chinese people. Its price rose sharply on the local stock exchanges.
Factors such as the ongoing trade war with the U.S. and the easing of monetary policy by the country’s central bank contributed to the depreciation of CNY/USD. In addition, the status of a legal and secure virtual asset has increased the interest of Chinese investors in Bitcoin.
(Featured image by Markus Spiske)
First published in rbc, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. B2I assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. B2I is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
Total Value of Investments on DeFi Platforms Falls Drastically
At the height of the popularity of Bitcoin and other coins, over $250 billion was invested in cryptocurrencies on DeFi...
Loopdx Opens €1 Million Round to Bring its Sepsis Biomarker to Market
n Spain, 17,000 people die every year from different types of septicemia. This condition is one of the most serious...
Why New York Raw Sugar and London White Sugar Trends Are Down
New York was lower again last week on ideas of bigger supplies. London also closed lower as White Sugar supplies and...
A Look at all the Recessions Since 1970: Three Hard Landings Stand Out
This past week saw a spectacular "rebound" "relief" rally. Could it turn into a summer rally? Just as the Fed...
Mr Bear Ain’t Going Nowhere
Since May 26th Mr Bear has been a very bad bear. We’ve seen three NYSE days of extreme market breadth...
Biotech6 days ago
Satellos Bioscience’s Stem Cell Signaling Research Could Turn the Tables on Muscular Dystrophies
Cannabis2 weeks ago
Luxembourg Approves the Self-Cultivation of 4 Cannabis Plants per Household
Crypto2 weeks ago
Solana Price Forecast: SOL Forms a Dead Cat Bounce
Crowdfunding2 weeks ago
Exporo Raises Funds, but the Company Value Decreases Instead of Increasing