Sunday, September 26, 2021

Bitcoin revisits $50K. What’s behind the rebound?

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On Sunday, Bitcoin reached $50,000 for the first time since May, a roughly 70% gain from July lows near $30,000. Now, as the broader market (propelled by a historically broad array of crypto) hovers above $2 trillion, is BTC poised for a return to all-time highs? To understand where things might be going next, let’s take a look at the bigger picture.

  • Global crypto adoption has risen 881% in the past 12 months according to Chainalysis, which attributes surging interest to BTC’s and ETH‘s recent renewed growth.
  • A slew of optimistic reports around crypto payments have emerged: Walmart, Amazon, and Apple all listed crypto jobs, an increasing number of athletes are choosing to get paid in BTC, and America’s second-largest mortgage lender announced it would soon accept BTC.
  • Bitcoin mining power has recovered 40% from July lows following China’s ban, though total hashrate remains well off May highsWhile some miners saw a temporary revenue boost from decreased competition, others have relocated to cheap-energy regions ranging from Kazakhstan to Texas — with over a dozen firms in North America racing to restore some of the six gigawatt capacity that went offline in China.
  • Blackrock, the world’s largest asset manager, has made significant bets on the mining industry. The firm, which oversees $9 trillion in assets, took roughly 6% stakes in public mining companies Marathon Digital Holdings and Riot Blockchain. Fidelity made similar investments in both companies in July.
  • Institutional money is flowing into BTC trusts, showing Wall Street’s growing interest in gaining crypto exposure. Last week, J.P. Morgan and Wells Fargo registered Bitcoin trusts, while new institutional money has been flowing into the $31.7 billion Grayscale Bitcoin Trust.
  • El Salvador’s Bitcoin law, which makes the crypto legal tender, takes effect on September 7. President Nayib Bukele tweeted about the official crypto wallet, Chivo (slang for “cool”), and the widespread rollout of Bitcoin ATMs — both of which will allow citizens to quickly convert BTC and dollars without commissions. Residents who download the wallet will receive $30 of BTC to get started.

Why it matters… While a series of negative headlines — from regulatory uncertainty to Elon’s market-moving tweets — sparked fears of another “crypto winter” after record-breaking gains this year, Bitcoin and the broader market have proved surprisingly adaptable. What’s different this time? Bigger and less reactive institutional players may be reducing volatility. At the same time, crypto’s global adoption, especially in developing economies, is growing fast. As Decrypt notes, Bitcoin’s price has become “increasingly resilient to the news cycle” — and in a truly global market, perhaps no one narrative dictates prices.

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Teodora Torrendohttps://www.ccdiscovery.com
Teodora Torrendo is an investigative journalist and is a correspondent for European Union. She is based in Zurich in Switzerland and her field of work include covering human rights violations which take place in the various countries in and outside Europe. She also reports about the political situation in European Union. She has worked with some reputed companies in Europe and is currently contributing to USA News as a freelance journalist. As someone who has a Masters’ degree in Human Rights she also delivers lectures on Intercultural Management to students of Human Rights. She is also an authority on the Arab world politics and their diversity.

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