Four Key Reasons For Currently Ripening Bitcoin Price Rally Which Is Up 133% So Far in 2019
The cryptocurrency market is up and thriving, touching new price highs every other day, and breaking past the key resistance levels with ease. Bitcoin is still the king and heading the current bullish trends, currently trading at around $8,800 price mark.
Bitcoin peaked its highest price of around $20k in December 2017, but the prices continued to fall throughout 2018, marking the longest crypto winter in the decentralized space. So, the community was quite hopeful for 2019, but analysts have warned that Bitcoin would only see a full-fledged bull-run towards the end of 2019, which might see its prices go up to $10k.
However, crypto space is known for the nature of its unpredictability, it has proven the same during 2018 winter when most of the Bitcoin bulls predicted the prices to double and triple from its peak in 2017.
The market has been bullish ever since the start of the year, but most of the gains that were made were almost immediately neutralized with a market pullback. However, things started to change from the start of April, where Bitcoin and major altcoins made double-digit gains and most importantly held onto those gains. The surge was again called a short term run with an inevitable bubble right on the cards. But the surge entered the month of May and the prices of cryptocurrencies continue to move up without any major resistance.
So, what has changed between the peak of 2017 and now that led to the current price rally in the crypto space when many analysts have predicted the bulls to take charge towards the end of the year.
Four Major Reasons For the Current Price Rally
The cryptocurrency space has grown in leap and bounds ever since the attention it received during the 2017 price rise. The biggest achievement for the crypto space is that it has turned its biggest critiques into a fanboy. Be it central banks around the world or the financial institutions like JP Morgan, or the institutional investors from wall street who claimed Bitcoin as an asset is too volatile to place a bet on.
1. The Inflow of Traditional Players
Be it AT&T deciding to start accepting Bitcoin payments, or JP Morgan, and Facebook launching their own stable coin, or Samsung adding a crypto wallet to their devices, the inflow of traditional players have surely generated enough confidence in the crypto space which might bring in more investors to the market.
The inflow is not just in terms of capital, the surge of traditional players have also brought in developers and talented business professionals who are making the space more reliable and trustworthy with each passing day.
2. The Weakening Trust in Equity & Debt Markets
The lowering trust in Equity and Debt Markets was one of the foremost reasons behind the invention of Bitcoin. Bitcoin was introduced to the world in 2009 on the back of the financial crisis. The global market instability and monopoly of banks have already put the world in $270 Trillion debt, and no matter what policy changes the current financial system brings in, it is impossible to go back from here.
Bitcoin eliminates the biggest factor that the old-age financial system is based upon, i.e “Trust.” The whole system of fiat is based on the trust, where the central banks churn out as much money as they wish to, and you have to take them by their words or “Trust Them.” The fiat currency is not backed by 100% reserve and only a certain portion of it is either backed by Gold or any other entity.
3. The Trade War Between China and the USA
The world is witnessing a continuous tussle between China and the USA to become the superpower of the 21st century. It has been going around for quite some time, but things took a nasty turn in 2019 when Trump decided to put a heavy tariff on incoming Chinese goods, and late even banned Huwaei from accessing any of the USA tech companies like Google and Qualcomm.
On the hindsight, China is facing troubles with its national fiat and Kyle Bass of Hayman Capital has been ringing the alarm bells for almost a decade. Bass cites the example of Iceland, Ireland, and Cyprus which fell like pieces of Dominoes on the back of the European banking crisis. The predominant reason for the fall of each nation was their banking systems which allowed them to grow by 1000% of their respective GDPs.
Arthur Hayes of Bitmex digs a little deeper into the brewing troubles in the banking sector of China. But instead of focusing on the US Dollar, Hayes believes Bitcoin could be the better store of value for the Chinese citizens.
The most important part though, Chinese citizens are aware of the falling value fo their national fiat Yuan and know that the government can't be trusted. This is the reason that Chinese citizens are more bullish towards Bitcoin and crypto than any other fiat. The declining Yuan has definitely added the current Bitcoin position in the market.
While the Chinese government has maintained quite a passive stance towards the crypto space, banning the use of crypto in their financial realm and earlier this year they put a complete ban on mining cryptocurrency. However, as the trade war is accelerating, the government seems to realize the potential of cryptos, and recently they allowed the citizens to hold Bitcoin as well as legalized over the counter trading.
4. Public Awareness is All-Time High
The awareness of the public towards the crypto space has grown in leap and bounds. In the early stages, people only flocked to the crypto space to make some quick money, however now that more institutional and traditional players have joined on the crypto bandwagon, the confidence of the community in the crypto market has seen significant growth as well.
Not only that, governments around the world have invested in studying the fairly new tech, and many have gone ahead to legalize the use while many others are looking to do the same.
The increase in the number of traditional players like AT&T and others joining on the crypto bandwagon is not because they want to promote the use of the digital assets, but it is mainly due to the consumer demand. Thus, a rise in consumer demands suggests that more people understand about it and are ready to invest in it than ever before.