The explosion in Bitcoin prices defines the cryptocurrency as a source of higher profits amid the uncertainty of the global market.
Cryptocurrency as a safe haven. The cryptocurrency market has experienced an unexpected boom over the past few months despite the fact that the number of cases of coronavirus worldwide is growing every day. Since the beginning of the year, the price of ETH and BTC, the most popular cryptocurrencies, has increased by 200% and 65%, respectively, which also brought the Commission for network transactions to a record level. The market capitalization of both cryptocurrencies reached sky-high heights in 2020, and the number of active bitcoin and Ethereum addresses became the second largest, after a sharp increase in prices in December 2017.
The explanation for this outstanding price-quality ratio lies simultaneously in several determining factors. One of them is the ever-growing concern about COVID-19 and its macroeconomic impact on the global economy, which gives reason to doubt that a full recovery will finally occur before the vaccine is studied and distributed to the population.
Taking into account the lack of certain steps so far, this may provide an explanation for why a large part of the population has converted their assets to cryptocurrency, rather than to the usual Fiat currency. In addition, the JPMorgan study highlights that cryptocurrencies have a much broader appeal among Millennials who prefer to store their assets in the crypt, for the upcoming period of an increasingly unstable global economy, as opposed to baby boomers who show a clear propensity to buy gold.
Second, the response to the surge in digital asset prices is to offer tokens. With assets such as Bitcoin, which due to its scarcity deserves to be referred to as digital gold, has already topped the list of crypto assets whose price is rising due to the very limited nature of tokens in circulation. It was limited to just 21 million coins.
Further spurred by the friendly regulatory stance of the authorities, including the recent approval in Russia of a cryptocurrency bill supporting the issuance of tokens by companies and the designation of cryptocurrency as taxable property, Bitcoin is now set for even wider global acceptance. Stablecoins are also facing a growing wave of interest. Since Tether is mainly used by many traders as an intermediate storage during short breaks between trades, its total turnover on the network has reached 10.3 billion. In addition, more and more world-famous organizations are showing interest in issuing their tokens. One of the most striking examples of this is Goldman Sachs, which just a few months ago criticized the PTS for its speculative nature, but later made a statement about the possible issue of the Bank’s own token. After a long round of negotiations, JPM Coin is expected to appear soon.
The crypto market is turning into a pool of huge profits for traders.
Observing the growing popularity of cryptocurrency and the crypto-economy, the trend has prompted new companies to accelerate their position in the crypto-market. Since some exchanges are already firmly established in this environment, new companies often join the circle to promote extended functionality. This is especially true for margin trading, which is already very successfully replicated after the Forex market.
In general, as the cryptocurrency market grows, it turns into a new edge for financial and digital technological development. Most likely, it will continue to develop in the future until it gradually reaches the same level as Forex and eventually overthrows it. This is why cryptocurrency trading platforms can become a tasty morsel for traders who want to expand their scale right now.