December 6, 2022

1businessguide

1businessguide

Three reasons why Bitcoin has grown by 16% in five days

 

Last Wednesday, we talked about the reasons for investors’ concern and rejection of risky assets. Forecasts about the collapse of cryptocurrencies and the stock market have reappeared. For example, Robert Kiyosaki (author of the bestseller “Rich Dad, Poor Dad”) predicts a full-scale financial crisis this month. Due to the intensity of passions at the end of September, the fear and greed indicator almost dropped to the lows of 2021, when Bitcoin was trading around $ 30,000.

However, over the past five days, fears have receded, and Bitcoin has grown by 16%.

Image Source: StormGain Cryptocurrency Exchange Image Source: StormGain Cryptocurrency Exchange

First, President Biden did not aggravate the situation and signed a decree allowing parliamentarians to settle the budget by December 3. The shutdown was postponed, and the government received the necessary funding.

Secondly, Fed Chairman Jerome Powell said that the regulator does not intend to ban cryptocurrencies. Another thing is the regulatory regulation of stablecoins, the release and provision of which should be supervised. The same applies to the DeFi market. But Bitcoin, being a decentralized and unaffiliated asset with any company, does not need such guardianship.

Thirdly, the Iranian authorities have lifted the restriction on mining for licensed market participants. The ban was imposed because of the increased load on the power grid, and many were concerned that this was just a pretext. However, now electricity has become available to miners again at one of the lowest tariffs in the world. The hashrate of the Bitcoin network has already exceeded the September highs.

Of course, the above factors do not remove the risk of a new financial crisis and the collapse of most assets, as Kiyosaki prophesies. However, the recent surge in the value of Bitcoin led to the liquidation of short positions on futures for $35 million on Friday alone. At the moment, the probability of the coin’s growth to $ 50 thousand is higher than the onset of the financial crisis in October.