The value of the most popular cryptocurrency bitcoin increased by 3% on Tuesday and is steadily approaching the $17,000 mark.
The CoinMarketCap portal, which calculates the average price based on the data from more than 20 exchanges, reports that at the moment bitcoin has reached $16,708. The price of the main digital coin on the largest cryptocurrency exchange Binance rose by 2.94% and stopped at $16,701. The last time bitcoin broke through the $17,000 mark was on January 7, 2018. Today, the most popular cryptocurrency accounts for approximately 64.9% of the market.
The continuous growth of bitcoin is easy to explain. Bitcoin no longer responds to political changes in the world. Still, the digital coin is quite sensitive to economic fluctuations. At the same time, the current stock market sentiment, which deteriorated due to a drop in Treasuries bond yields, is beneficial to bitcoin as it is now viewed as a safe haven asset.
Some experts believe that the rise in bitcoin was caused by the weakening of the US dollar and the increased value of risk assets such as oil, stocks, and metals. The current uptrend has been going on for more than a month, which is quite a lot compared to previous years. In case of a correctional decline, bitcoin can fall by 20-30% in just a week. Nevertheless, bitcoin is more likely to continue its steady and gradual growth until the end of the year.
It is important to note that not only bitcoin, but almost all altcoins have shown an uptrend over the past day. The same is true for all other digital coins from the top 100, as they are also trading in the green zone. In addition, the demand for DeFi is back. Thus, the yearn.finance (YFI) coin grew by 12% per day and again crossed the $20,000 mark. The total cryptocurrency market cap increased by almost $13 billion per day to $475 billion and is now approaching an important psychological level.
By the way, until recently, hardly anyone could predict such a stable positive trend in the cryptocurrency market. Last week was rather contradictory for the digital coin market. On the one hand, bitcoin was able to break through and settle above $16,000. On the other hand, most altcoins significantly depreciated.
Experts predict glorious prospects for the flagship of virtual currencies in the foreseeable future. So, some analysts argue that by December 2021, the bitcoin rate can reach $318,000 thanks to acquiring the status of digital gold of the 21st century.
In support of this forecast, experts draw an analogy between bitcoin and gold in the 1970s when the Bretton Woods system was rejected in 1973. This provoked the transition to the Jamaican monetary system. This event marked the beginning of the decoupling of the US dollar from the gold equivalent. Then the regime of fiat currencies appeared in the form it exists today. Analysts recall the spike in gold prices over the next 50 years and see monetary inflation and the US dollar devaluation as conditions for comparing gold and bitcoin.
In 2008, the first cryptocurrency was created in response to the global economic crisis which transformed monetary policy towards zero interest rates. This can also explain the fact that bitcoin increased 555 times in the first bullish cycle between 2011 and 2013.
Today's monetary and fiscal policies create preconditions for a collapse in fiat currencies, just as it happened in the 1970s. So, this will likely lead to an increase in demand for gold and its digital equivalent, bitcoin.
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