Bitcoin (BTC) has been slow in 2018. Uncertain economic and geopolitical circumstances have weighed on the lead crypto’s value by up to 50 percent since its November highs. But that may be changing, according to several sources .
Bitcoin has now broken through $47,000 for the first time since January. According to CoinGecko statistics, Bitcoin has risen more than 25% in the previous two weeks. Other top cryptos have seen similar increases, including Ethereum (ETH), which is up around 30%. So what’s behind these price rises and will it continue?
What’s driving Bitcoin’s soaring price?
Bitcoin’s price is up because of a variety of reasons. The following are some examples:
1. Terra’s Bitcoin buying spree
In March, LUNA (Terra) revealed it would acquire $10 billion worth of Bitcoin as part of a plan to establish a reserve fund behind its UST stablecoin. It intends to start by purchasing $3 billion in Bitcoin in the near term and gradually adding the remaining $7 billion over time. According to media reports, Terra’s foundation is buying quantities of $125 million at a time. This has aided significantly to the price rise.
2. Market sentiment turning positive
Sentiment is frequently a significant factor in cryptocurrency valuations. Because cryptocurrency is a relatively new and unregulated market, obtaining accurate and dependable knowledge might be difficult. This implies investor morale and sentiment may have a bigger impact on price than in traditional markets.
According to the Crypto Fear and Greed Index, which uses a variety of criteria to measure crypto optimism, confidence in cryptocurrencies is at its highest level this year. We were still in “fear” last week. Yesterday we changed course to “neutral,” and today we moved into “greed,” with the greatest score the index has recorded since November.
3. Russia, crypto, and sanctions
It’s unclear how much Russia will be able to utilize cryptocurrency to avoid penalties. However, the prospect that Russia might accept crypto payments for oil and gas indicates that investors cannot afford to ignore this issue. The invasion of Ukraine by Russia has prompted a number of measures from various nations, and some individuals, including Sen Elizabeth Warren, have expressed concern that Russian oligarchs may be able to utilize digital currencies to conceal portions of their assets. Sanctions against cryptocurrencies are also in place. However, it appears that ordinary Russians have turned to cryptocurrency as a means of protection against the Russian ruble’s weakening value. We don’t know if Russia’s billionaires were able to do the same.
4. Continued strides in crypto adoption
2017 was a watershed year for cryptocurrency. These include greater institutional acceptance and an increase in retail investors. According to Pew Research, 16% of Americans have engaged in crypto trading or usage in some manner. Most recently, Goldman Sachs became the first major U.S. bank to trade bitcoin over-the-counter, setting another significant step toward mass adoption.
Nothing is certain. In the long run, some experts think Bitcoin’s value will rise, while others predict a market collapse. You’ll discover projections that Bitcoin could reach $100,000 by the end of this year as well as those who believe it may be valued at $1 million by 2030 among the optimists. In reality, predicting the price of Bitcoin is quite difficult because there are so many variables with little reliable foundation. The most important thing to remember is that you should only invest money you can afford to lose, and that Bitcoin should be a part of a well-balanced portfolio. You’ll avoid financial ruin if the cryptocurrency market crashes, but you’ll also be in a position to take advantage of any price increases.