On Monday, July 27, the global cryptocurrency market showed record growth. During the trading, the bitcoin price grew by more than 8% and for the first time since September 2019 exceeded the $ 10.8 thousand mark.
Other digital assets have shown similar dynamics. For example, Ethereum grew in price by 3.5% (up to $ 320), and bitcoin cash - by 6% (up to $ 260). At the same time, the total capitalization of the electronic money market increased by 5% - to $ 314 billion. Such data are provided by the Coinmarketcap portal.
In many ways, the observed rise in the price of cryptocurrencies, interviewed by RT experts, is associated with a sharp weakening of the dollar in the world market. On Monday trading, the corresponding DXY index dropped to 93.5 points. The value was the lowest since June 2018.
“We see that in recent days the US national currency, as a global unit of measurement, began to depreciate sharply. In the conditions of the depreciating dollar, literally all possible financial assets are rapidly gaining weight: metals, commodities and currencies are becoming more expensive, ”said Pyotr Pushkarev, chief analyst at TeleTrade, to RT.
According to him, the US FRS actions put pressure on the American currency. Recall that at the end of March, against the backdrop of the outbreak of the coronavirus, the US Federal Reserve announced an unprecedented expansion of the quantitative easing program. The regulator began to print dollars and buy bonds in an unlimited amount on the stock market. Such a policy should lead to an increase in the money supply to the economy and help to increase the rate of GDP growth. At the same time, the Fed's measures lead to a weakening of the dollar, Pushkarev added.
In addition, the aggravation of relations between Washington and Beijing had a negative impact on the dynamics of the US currency. Alexey Kiriyenko, managing partner of EXANTE, expressed this point of view in a conversation with RT.
“The confrontation between the States and China is entering an acute phase. At the same time, the conflict already affects not only trade relations, but is also accompanied by territorial disputes, accusations of violations of international law, hacker attacks and the closure of diplomatic missions. Probably such harsh rhetoric is Donald Trump's electoral strategy to attract voters. This creates an unfavorable situation for financial markets, which threatens with unexpected events, "Kiriyenko explained.
The expert also connects the rise in prices for cryptocurrencies with the consequences of the halving that happened in the spring - changes in the rules for mining bitcoin. Traditionally, the event takes place every four years and is one of the defining dynamics of the global digital coin market.
Bitcoin exists on the basis of blockchain technology - a single database that contains information about all transactions carried out. The emission of new cryptocoins occurs due to mining - solving complex mathematical problems and the appearance of a new block in the blockchain network. Each such block is a data array, where information about all operations performed after the creation of the previous block appears. For solving the problem, miners receive a reward in the form of bitcoins.
Every year the search for such blocks becomes more difficult and requires more and more computing power, and the mining reward decreases. So, in 2009 it was 50 bitcoins per block, in 2012 it dropped to 25 bitcoins, and in 2016 - to 12.5. On May 11, 2020, the remuneration of miners was again halved and reached 6.25 bitcoins.
According to Aleksey Kiriyenko, mining of new bitcoins is now slower. At the same time, the demand for electronic coins is still growing at the same rate.
“After the halving, the supply of bitcoins decreased, which was a strong factor against the sharp decline in prices. Now miners are not ready to sell bitcoins for less than $ 6-8 thousand per coin, ”the expert added.
As the leading analyst of Forex Optimum Ivan Kapustyansky told RT, after reaching record levels in the near future, the bitcoin rate can briefly adjust to $ 10 thousand per coin. Meanwhile, in the coming months, the indicator may continue to grow and exceed $ 12 thousand, the specialist said.
According to the forecast of Peter Pushkarev, by the end of the year, bitcoin may rise in price up to $ 15 thousand. At the same time, the expert warns of the continuing risks for the global cryptocurrency market.
“The expected price peak risks being short-lived. Investors this year have repeatedly demonstrated that they are ready to immediately sell any asset that has risen in price too much and simply withdraw the profit from the market, ”the analyst added.