By Andrew Collins, investor and consultant. Eurasia Business News, October 6, 2021
After a month’s break, the Bitcoin price returned above the level of $ 50,000, to hit $54,000 on October 6. Over the week, the leading cryptocurrencies added more than 20% in price. Market stakeholders quickly returned to the game of increasing virtual assets, even amid expectations of tightening monetary policy by the US Fed and regulation of the crypto market in China.
Long-term investors actively bought out bitcoin when its price has fallen. Therefore, the May maximum of $ 52.9 thousand and the historical maximum of $ 64 thousand could be reached in the near future.
The Bitcoin capitalization exceeded $ 938 billion. Other cryptocurrencies also behaved quite dynamically in the last week. Ether, Solana, Dogecoin added more than 20% in price, Binance Coin increased by almost 30%.
At the end of September, quotes for bitcoin, ethereum and ripple updated two-month lows amid fears of a possible reduction in stimulus measures from the US Fed and toughening of the requirements of the People’s Bank of China to cryptomarket players. However, if earlier, after the collapse, the crypto market moved in the same direction with the US stock indices, then in the last days of September this correlation was broken.Cryptocurrencies receive an influx of investor funds. In addition, many institutional players used the drawdown in order to buy back the asset. In particular, Bitcoin price has increased amid comments from Bank of America strategists who supported cryptocurrency as a new asset class.
The influence of the Chinese regulator on the cryptocurrency market has decreased and will not play a decisive role in the future. Most of the crypto infrastructure has already left China. The Asian giant has cleaned up the industry inside its boundaries completely, and therefore will no longer be able to restrain price levels.
The world’s first cryptocurrency will probably continue to grow. The closest psychological threshold is $ 60,000. The next milestone will be the historical figure of $ 64 thousand, hit in April 2021. This level might be reached next December, when the US Securities and Exchange Commission plans to consider a number of applications for Bitcoin ETFs.
When bitcoin price fell in September, long-term investors continued to strengthen their positions, reducing the available supply in the market.
Large investors, banks from Goldman Sachs, JP Morgan to Morgan Stanley, investment fund like SkyBridge Capital, fintech like Paypal or Square Inc. and industrial tech companies such as Tesla Inc have invested significant funds in Bitcoin or have started to offer access to crypto-funds. Cryptocurrencies are now backed by financial institutions, exchanges, miners. Some will say now that State can use cryptocurrencies and recognize them as legal tender. In 2021, El Salvador decided to adopt Bitcoin as its national currency.
In addition, Bank of America launched on October 4 its digital asset research with the publication of a report entitled “Digital Assets Primer: Only the first inning,” led by Alkesh Shah, head of Global Cryptocurrency and Digital Asset Strategy. The report cites blockchain as “the most exciting new market” to emerge in recent years.
According to Bank of America : “Digital assets represent a $2 trillion+ market value with 200 million+ users, and have the potential to transform every industry by improving efficiency and reducing friction across transactions. Hundreds of companies are forming within this new ecosystem, creating a new asset class.“
What we can be sure is that more actively the crypto-infrastructure develops, the faster Bitcoin and other cryptocurrencies rate will grow.
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