In recent weeks we have witnessed a steady growth of cryptic Bitcoin and you know what? Bitcoin is growing again, leaving it close to its record level.
Crypted Bitcoin has grown by over 17% to a record level of $28.220 between 4pm on Friday and late morning on the East Coast on Sunday. Since then, profits have decreased, but the price is still much higher than the Friday afternoon level. Mid afternoon on Monday it was only 3.8% below its level. It is not entirely clear why Bitcoin took off, but the price goes along with the prices of more risky assets. This means that when investors are willing to take more risk for higher profits, they will buy Bitcoin.
Update from 30.12.2020
BitCoin today achieved a result of $27.905.32 which is a change of 4.04% from 24 hours. Converted into zlotys, its value is 102,315.13 PLN.
Bitcoin and growth stories
Bitcoin hit the bottom on March 12th, less than two weeks before the world stock market reached its low level at the outbreak of the pandemic. Since then, Bitcoin has increased by more than 450%, while S&P 500 has increased by 67% from its lowest level, which reached 23 March.
Since mid-March, the US dollar index (DXY), which is an indicator of interest in dollar-denominated safe assets among international investors, has fallen by 12% as the global economy rebounds. In mid-March, the Federal Reserve said it would provide as much monetary stimulus as the U.S. economy needed, which reduced interest rates and led to expectations that it would stay on the bottom.
Long-term government bond yields are now below the expected inflation rate, which reduces the interest rate on the debt, as well as the dollar needed to buy it. Investors have moved to more risky assets, including Bitcoin, in search of higher returns.
Since the closing of the stock exchange on December 22nd, when the short pause in the stock rally ended, S&P 500 has increased by one tenth of a percent. Since then, treasure prices have fallen and the 10-year treasure profitability has fallen to 0.94% from 0.92%. The dollar index fell by 0.3%.
One thing that is certain is that when the market environment is focused on profits from more risky assets, Bitcoin can be a cool transaction.