- Bitcoins are also gaining values because major companies such as Square and MicroStrategy purchased Bitcoins in higher amounts
- Mike McGlone, the investment strategy expert at Bloomberg, says, the bitcoin’s growing values unless there are some unfavorable conditions exist
Bloomberg, one of the most successful financial magazines of the US, says that the prices of Bitcoins are at an overheating stage.
Bitcoin price was highest on the 21st, crossing $13000. One of the major reasons for this is the news depicting that virtual currency will be available on the PayPal Platform. Payal is one of the major payment companies in the US. The Relative Strength Index(RSI) also exceeds 80, which is the symptom of overheating in the market.
Luke Martin highlighted the recent performance of Bitcoin and its trends in the market. According to data from Coin Metrics, bitcoin has gained 13% among the top coins by market cap. While Ethereum is only at 3%, XRP at 2%, and Litecoin at 3% growth.
Bullish Strategy is the Main Reason
Mike McGlone, the investment strategy expert at Bloomberg, says, the bitcoin’s growing values unless there are some unfavorable conditions exist. Bitcoins are also gaining values because major companies such as Square and MicroStrategy purchased Bitcoins in higher amounts and are still planning to buy more.
The holding of a large number of Bitcoins in the form of speculation reserves or in form of investment funds creates a shortage of Bitcoins in the market. As a result, the bitcoins become unavailable for general purchases and thus cost of bitcoins rises. The investors collect bitcoins from the market before the price of the Bitcoins rises. They also withdraw all the coins from the exchange and hold them until the coins’ price rises.
Increasing the Bitcoins’ liquidity is also one of the major factors for the prices of Bitcoins to rise. Years before, when there was a 50% price fluctuation in Bitcoins, it was due to a low liquidity rate.
Media coverage also creates pressure on investors and increases their interest to invest in bitcoins. Many major financial instruments allow big banks to invest in Bitcoin rather than purchasing actual currency.
There is also a growing distrust in currencies within the public. People who have lost trust in their country’s economic policies and banking system find it safe to invest in bitcoins. For example, the rate of Rupee is not stable. So its exchange rate with USD tends to rise. Thus, motivating people to invest in virtual currency rather than Fiat currency. All such factors make the prices of bitcoins rise, and the same trend is predicted in the future.
Join The Coin Republic’s Telegram Channel for more information related to CRYPTOCURRENCY NEWS and predication.
Download our App for getting faster updates at your fingertips.