The Bitcoin rate surpassed $10,000 for the first time since October last year. Since the beginning of the year, cryptocurrencyincreased in price by more than $2.5 thousand.According to the largest exchanges, at the moment the asset sank slightly below $10 thousand, but continues to trade around this level. Bitcoin's strong growth began in mid-December and accelerated amid the confrontation between the United States and Iran, as well as worsening economic forecasts due to the coronavirus. As Bloomberg wrote, many investors believe that Bitcoin can become a protective asset during global turmoil.
What is the reason for the growth of cryptocurrency and can itbecome a new defensive asset? According to the co-founder of the platform for crypto funds Tokenbox Vladimir Smerkis, the growth of the Bitcoin rate is quite natural, and it can help secure savings.
Vladimir Smerkis, co-founder of the Tokenbox crypto fund platform:
“Bitcoin is far from gaining its strength,compared to what it should cost. Bitcoin is preparing for halving, it will be more difficult to mine. There has always been a limited supply of 21 million coins. Accordingly, the demand for it as a financial instrument is growing and existing. And it’s logical that its price is slowly going up. We are not now seeing the harsh speculative movements that were in 2017, when from $900 at the beginning of the year it rose to $20 thousand. We are seeing a smooth increase from the beginning of 2019, when Bitcoin cost a little more than $3 thousand, to $10 thousand.
During financial crises and difficulteconomic situations in the world, Bitcoin was a protective instrument, a defensive asset, since the authorities of any countries cannot have a significant influence on it. It can be transferred quite easily from one country to another, transfers are possible. Therefore, of course, it is a cross-border, cumulative tool, which is what people, in fact, use. In the near future we will see the cost of Bitcoin around $11.5 thousand per coin. “During this year, we may be able to reach new heights, surpassing the $20 thousand that we had at the end of 2017.”
At the same time, many investors stillconsider Bitcoin to be too risky an asset, notes Alexander Butmanov, Chairman of the Expert Council on Blockchain Technologies of the DTI Algorithmic Foundation. He emphasizes that the cryptocurrency market is almost unregulated, and the current rise in the value of the coin may be caused by the actions of interested players on exchanges.
Alexander Butmanov, managing partner of the fintech company DTI Algorithmic:
“This is super speculation, and it comes from specificplayers on the exchange - Bitfinex. They are affiliated with the USDT cryptocurrency. The dependence is this: after new USDT are issued and fall into the hands of players close to the Bitfinex exchange, strong movements in Bitcoin occur. This cryptocurrency is an alternative asset, it does not have the same hedging function as gold because it is too early for such things - still decades are needed. But, indeed, Bitcoin has taken its place in the universe, which is called an alternative asset class. Most likely, he will not disappear anywhere"
Bitcoin reached its peak value of $20 thousand at the end of 2017. Then the value of cryptocurrency increased by 1400% over the year.
Original - Kommersant.
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