Digital uncertainty: what are the reasons for the sharp fluctuations in the Bitcoin exchange rate in August

In August, the Bitcoin exchange rate showed serious instability. The first sharp drop was recorded in the middle of the month - then the digital currency immediately lost 8% per day. In the next seven days, the coin won back the fall and reached $ 10.8 thousand at the end of the week. Then, the digital currency rate plummeted by almost $ 800.

Bitcoin responded to a statement by US Secretary of State Mike Pompeo on CNBC about the need for tight regulation of operations with digital assets.

It is curious that in July there was a similar decline in the course against the backdrop of criticism from the United States President Donald Trump.

Experts believe that the concern of the US government is caused by the Facebook project to launch its own cryptocurrency Libra.

“The main risks of Libra will depend on what traditional currencies this project will be tied to and what role the US dollar will play in it. If the currency is closely linked to the dollar, this may lead to the coexistence of sovereign currencies with digital currencies oriented to the American national currency, ”said Gaidar Hasanov, an expert at the International Financial Center, RT.

The expert also did not rule out that the development of the Libra project could push the People's Bank of China to issue its own cryptocurrency, tied to the renminbi, to support the local economy.

The dynamics of cryptocurrencies are also affected by trade disputes in Washington and Beijing.

“We observed that at the time of the aggravation of the situation between the United States and China on trading duties, investors had a demand for gold and cryptocurrencies, so the price of bitcoin rose to $ 12 thousand,” private trader Alexander Boyarintsev said in a conversation with RT.

Hope for a trillion

Analysts at Digital Asset Research, a cryptocurrency market research company, cite another key factor that could significantly affect the future bitcoin exchange rate. We are talking about halving the remuneration for mining.

Mining is the “mining” of cryptocurrency using high-power computing technology.

The next such reduction will occur in 2020. According to company forecasts, in May of next year, the bitcoin exchange rate can skyrocket to almost $ 60.6 thousand.

Researchers at Digital Asset Research have found one interesting pattern. They report that after each reduction in mining rewards, bitcoin rises upward, increasing by about a third. Moreover, each subsequent peak becomes larger than the previous one.

Thus, while maintaining this trend, bitcoin can reach its “ceiling” in September 2021, which will already exceed $ 60.6 thousand. However, the study said that for such a rise in price, approximately $ 1 trillion should be injected into the digital currency market.

Sensitive reaction

Experts interviewed by RT do not expect significant growth in digital currency until the end of 2019. So, the director of the Academy of Finance and Investment Management Arseniy Dadashev said that in the near future the Bitcoin exchange rate could drop to $ 8 thousand.

“If you calculate the capitalization of Bitcoin based on the number of active users, then it equals $ 100 - $ 120 billion. In other words, there is no good reason for the price increase at the moment, and the take-off to $ 13.5 thousand, most likely, occurred against the background of manipulation of the course by the trading floors, ”the expert says.

According to Gaidar Hasanov, in the medium term, the Bitcoin exchange rate will be in the range from $ 9.5 to $ 10.8 thousand. However, in the long term, growth is possible up to $ 12 thousand. Like many others in the expert community, Hasanov indicated the situation with trade wars in as a reason that will affect the course of bitcoin in the near future.

“Bitcoin has become sensitive to geopolitical news. The deterioration of the situation and the risk of a new round of trade wars increases the course. With positive expectations, the rate of bitcoin is reduced. This situation may continue for quite some time, as stakeholders have no clear plans to resolve trade disputes, ”Hasanov said.

At the same time, Alexander Boyarintsev's forecast for the dynamics of the main cryptocurrency is slightly more optimistic. In his opinion, the price of bitcoin will not fall below $ 10 thousand, and by the end of the year, the expert suggested an increase to $ 15 - $ 20 thousand.

Bitcoin began to grow at a rapid pace in 2017 - from $ 900 at the beginning of the year, the rate of electronic currency soared to its record peak of $ 20 thousand. After that, Bitcoin also rushed sharply down. Since the end of last year, cryptocurrency has been trading near the $ 3,000 mark, waiting for a new summer growth in 2019.