Trump's victory and plans to make the US the world capital of cryptocurrency: the price of one bitcoin at an all-time high of $80,000
How To Understand Bitcoin's Price Surge Dynamics
Peter Hoskins
Designation, Business Reporter
1. Supply and Demand
Bitcoin's supply is capped at 21 million coins, making it scarce. Halving events, where the reward for mining Bitcoin is cut in half (every 4 years), reduce the rate of new Bitcoin entering circulation, which can drive prices up as demand remains steady or increases.
2. Market Sentiment and Speculation
Bitcoin's price is highly influenced by investor sentiment and speculation. Positive news, like institutional adoption or regulatory approvals, can drive demand, while negative news can have the opposite effect.
3. Macro-Economic Environment
Inflation concerns, currency devaluation, and low interest rates often increase Bitcoin's appeal as a hedge, especially during economic uncertainty. A weak economy can drive people to consider Bitcoin as an alternative store of value.
4. Liquidity and Whale Activity
The market's liquidity is influenced by “whales,” or large Bitcoin holders. When whales buy or sell in significant quantities, it can create substantial price swings due to Bitcoin’s relatively low liquidity compared to traditional markets.
5. Regulatory Developments
Bitcoin is sensitive to global regulatory changes. Positive regulations (e.g., tax guidance, fund approvals) can boost prices, while restrictive regulations (e.g., outright bans, trading limits) can lead to sharp declines.
6. Innovation and Adoption Trends
Bitcoin's price is affected by technological advancements and its adoption as a means of payment or an asset class. Increased institutional interest (e.g., ETFs, corporate investments) validates Bitcoin’s role in finance, supporting price increases.
Immediately after the victory of Donald Trump in the presidential elections of the United States, the price of one bitcoin exceeded 80 thousand dollars for the first time.
Earlier in March this year, the price of one bitcoin had crossed 69 thousand US dollars and investors were hoping that this digital currency would once again regain its lost value.
But perhaps they also did not realize how important the US elections would play in this matter, especially Donald Trump.
It should be noted that the price of Bitcoin is touching historical highs at a time when the Republicans in the United States are close to gaining complete control of the Congress while they also hold a majority in the Senate.
But what does US politics have to do with Bitcoin?
During his presidential campaign, Donald Trump announced that he would make America the crypto capital of the planet.
Remember that the value of the world's largest cryptocurrency, Bitcoin, has increased by more than 80% this year alone.
During his presidential campaign, Donald Trump announced that he would make America the crypto capital of the planet
And it's not just about Bitcoin, other cryptocurrencies around the world have also seen an increase in value. Among them is Dodge Coin, a prominent promoter of which is Elon Musk, a Trump supporter and the billionaire owner of X.
Elon Musk, the head of American technology company Tesla, has been a supporter of cryptocurrencies. But in 2021, when he announced that his company Tesla had abandoned plans to accept payments for its vehicles through Bitcoin, the price of Bitcoin saw a drop. At that time, the price of one bitcoin reached 40 thousand dollars.
Earlier in December 2017, the price of Bitcoin was 10 thousand dollars.
In the recent US elections, Elon Musk came out openly in support of Trump and during his campaign, Trump also supported Bitcoin. He said before the election that he would strategically collect bitcoin and also appoint financial regulators on the matter.
Remember that Trump has also announced that he will remove the current head of the US Securities and Exchange Commission, Gary Gensler, who has cracked down on the crypto sector since his appointment in 2021.
However, it should be noted that Donald Trump's agenda, which includes tax cuts and easing restrictions on businesses, has led to a boom in many other sectors as well. The value of US bonds, including the US dollar, has also increased.
What is Bitcoin?
Many people may not know about cryptocurrency but everyone must have heard the name Bitcoin. But what is it?
Bitcoin is a cryptocurrency which you can also call a digital currency. It is different from the traditional currencies used around the world, such as the dollar, pound or rupee, because it is not controlled by an authoritative financial institution.
Perhaps this is the reason why people believe that a currency that is not controlled by an institution gives them financial freedom, but on the other hand, the value of this currency is subject to uncertainty.
In February 2024, after a record decline, the price of Bitcoin started to rise sharply again and today it has reached historical levels. And it was a very good news for those who have this currency.
But it is also worth noting that just a short time ago, the value of Bitcoin fell sharply, and this has happened several times before in recent times.
Bitcoin is a cryptocurrency which you can also call a digital currency
Blockchain
Blockchain is a technology that not only underpins all cryptocurrencies, but NFTs are also powered by it.
In common parlance, it can be said that it is a spreadsheet on which the buying and selling of cryptocurrency is recorded. These buy and sell are present on the sheet in the form of blocks which are connected to each other in the form of chains.
Each cryptocurrency transaction is recorded on the blockchain with the help of a network of volunteers, and these volunteers also verify the purchase and sale of the currency through computer programs.
The benefit of Bitcoin network volunteers is that whoever verifies the transaction first is rewarded with Bitcoins.
This profitable process is called 'mining', but the process is also controversial because people around the world are in a race to be the first to be confirmed and because of this, electricity is also wasted.
The total number of bitcoins in circulation around the world is 1.9 million.
Crypto exchange
A crypto exchange is a digital platform where investors buy and sell cryptocurrencies.
Like the traditional way of doing business, a crypto exchange works like a brokerage house where people can withdraw their funds from banks and convert dollars or pounds into cryptocurrencies like bitcoin or ethereum.
Investors also often have to pay fees to convert traditional currencies into digital currencies.
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#Technology #Donald_Trump #business #America
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