Why did the Bitcoin rate update its record?
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Bitcoin has reached a new all-time high. On March 5, it was worth $69.2 thousand, according to Coindesk data. The indicator updated the November 2021 record. Then the token only approached the $69 thousand mark, but never reached it. Over the past month, Bitcoin has risen in price by about 60%, and its capitalization has exceeded $1.3 trillion.
What could be causing the record numbers? Digital & Analogue Partners partner Yuri Brisov explains the excitement by the planned reduction in the new emission of cryptocurrency, which will occur in April: “Halving is approaching – this is a mechanism inherent in the Bitcoin economy, when the reward of miners is halved. “Half” – from the word “half in English.”
Miners currently receive 6.25 bitcoins for forming one valid block, and once the halving occurs, they will receive 3.125 bitcoins. And as soon as there is less of a resource in the world, it becomes scarce, which means more expensive, and its price immediately increases. This happens with both gold and diamonds. The same mechanism was preconditioned by Satoshi Nakamoto into Bitcoin, and this mechanism has been working since the very moment the cryptocurrency was created. If we look at the price of Bitcoin from 2009 to today, we see that, firstly, Bitcoin is constantly growing, and secondly, we see that when approaching halving, the price of Bitcoin always increases.”
Immediately after updating the maximum, the cost of the crypto coin dropped to $67 thousand, and on the night of March 6 it completely fell to $60 thousand. Similar jumps should be expected in the future, says cryptocurrency consultant Sergei Pushkarev: “Bitcoin began to fall at the moment when America opened – this is 55-60% of Bitcoin trading. This means that for some reason the American seller started selling Bitcoin.
The easiest way to explain this is psychology: the peak has been reached, and some Bitcoin holders believe that it may not go higher. If you look deeper, there were very large sales of Grayscale Trust – this is one of the large holders and a long-standing public company. They have been actively selling significant volumes lately.
Should we expect new leaps? Definitely. As up, so down. Volumes in Bitcoin ETFs have exceeded $50 billion. This is a very large figure, and all these Bitcoins were purchased on the market by ETF issuers. Bitcoin was purchased with this $50 billion. Part of this amount was formed due to the growth of the exchange rate, but part of it was purchases from the market. Plus, the upcoming halving puts a lot of positive pressure on the price. But there are also players who believe that because of the halving, the Bitcoin rate may go down, and they are also trying to play on this, which is why there was such a rebound.”
Bitcoin has been growing continuously since the end of January – on the 22nd it barely exceeded the $39.5 thousand mark. Then the cryptocurrency began to regularly update multi-month records. Among the possible reasons for the growth, experts also cite regulatory relaxations adopted in January by the US Securities and Exchange Commission: it approved the country’s first bitcoin exchange-traded funds.
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