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02.03.2021 04:38 PM
Criticism, investments, and financial reports: how important is the information background for the development of the cryptocurrency market

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The opposite example is the news about the next investment in the cryptocurrency market. On Tuesday, March 2, MicroStrategy announced that it has bought $12 million worth of bitcoins. Thanks largely to this announcement, the market is showing good growth. However, do not forget about the root causes of such news. Behind them, there are always certain economic indicators that push companies to commit or refrain from making investment injections. However, without a wide announcement of this event, major cryptocurrencies did not show a commensurate growth.

Another important category of impact on bitcoin quotes is announcements. A similar technique is used by large international companies and declare their intention to take some action in relation to the crypto market. For example, Visa was the first company to announce to the whole world the creation of an algorithm that will help use cryptocurrencies as a full-fledged means of financial transactions. This announcement was the reason for the long-term growth of cryptocurrencies and the creation of a certain springboard. Thanks to the announcements, investors understand that this financial instrument has great prospects for development.

A very important factor that can radically change the market mood is the publication of financial and other statements of large companies and investment funds. This information does not get into the general public because of the need to have specific knowledge to understand it. However, for market participants, this is a very important source that helps to draw certain conclusions, the dynamics of market development and protect themselves from losses. A striking example is the JPMorgan report on the solvency of the company that produces Tether stablecoins. The publication of the bank's analytical service was another reason why the bitcoin exchange rate collapsed.

To top it off, we can say that the information background is an important factor for the growth of the cryptocurrency market and the popularization of digital money. The situation in mid-February also showed that an excessive amount of positive information can cause unjustified growth (which happened with bitcoin). And at the same time, the constant stream of loud announcements and news is one of the reasons for the excessive volatility of the main crypto assets.

Artem Petrenko,
Especialista em análise na InstaForex
© 2007-2024
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