Bitcoin is rising yet again.. Bitcoin is currently changing hands at… | by Mohamad Hakim | Mar, 2022
Bitcoin is currently changing hands at $44,000 after months of trying to break through the $42,000 resistance.
So what is causing its rise now?
If you are new to the space, you need to know that cryptocurrencies are one of the most speculative assets you can invest in. Its rise and fall are attributed to mere speculation and rumour. Therefore, predicting it will be near impossible.
However, recent trends have shown that cryptocurrencies, particularly Bitcoin, mirrors the movement of tech stocks — high growth potential but, at the same time, very risky.
After a tumultuous start to the year, the price of Bitcoin seemed to have stabilised. Its utility is proven in the Ukraine-Russia war and more and more people are buying up the asset, solidifying the coin’s position in this new world order.
Furthermore, inflation and interest rate fears have started to cool after the Fed announced a 0.25% rate hike.
However, according to Delphi Digital, $BTC’s year-over-year (YoY) returns have turned negative, indicating a slow down in rallies.
Regardless, the current short-term rallies in Bitcoin are attributed to the stock market’s rise as investors become more confident about the future.
The EU’s dependence on Russian oil exports does not seem to be waning in the short-term, along with the clear direction of the Federal Reserve may be boosting investors’ confidence.
$BTC’s future may continue to be riddled with twists and turns as countries roll out new laws to regulate the space. For example, a bill was passed in India indicating the need for Indians trading cryptocurrencies to pay a 1% capital gains tax.
Furthermore, Coinbase would require traders sending crypto to indicate recipient information such as names and addresses. This is an example of growing regulation surrounding the once considered ‘de-fi’ market.
Despite my arguments for regulation, disrupting the very nature of crypto could pose more harm than good, but that’s a story for another day.
I doubt this regulatory behaviour will stop any time soon. In the meantime, cryptocurrencies will continue to be fighting an uphill battle. We shall see what happens.
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