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Why Bitcoin Rises While Other Assets Don’t (Why Bitcoin Surges)

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Why Bitcoin rises while other assets don\’t? Why Bitcoin rises while other asset

Why Bitcoin Rises While Other Assets Dont (Why Bitcoin Surges)

Why Bitcoin rises while other assets don’t? Why Bitcoin rises while other assets don’t?

After the crazy crash in the cryptocurrency market last year, Bitcoin also began to decline. However, the price has not broken the previous high since the beginning of this year, and it wasn’t until May that it climbed back above the $20,000 mark (currently up more than 30%).

According to Bloomberg, the U.S. stock market fell below $20,000 on Monday after the market closed, and then rebounded to over $4,000. Meanwhile, other mainstream digital assets around the world have not kept up with the trend: the Dow Jones Industrial Average fell by 6.52%, the S&P 500 Index rose by 12.28%, and the Nasdaq 100 plummeted; the S&P 500 Index fell by 15.23%, the Dow fell by 16.84%, and oil prices fell even more.

This shows that investors still have confidence in the “bull market is coming”. However, if they see the price of Bitcoin continue to soar, they will find that many retail investors do not have the motivation to short-sell it, but instead choose to wait and see, because they don’t know how to evaluate assets like Bitcoin.

Therefore, some people are worried that with time, the price of Bitcoin may experience rapid declines or even a crash. This situation may also change.

In fact, the reason why Bitcoin can sustain for such a long time is mainly because it has gone through several cycles of change, and these changes are not very profound.

Essentially, this process does not happen all at once, but gradually over a long period of time. Since Bitcoin shares similar attributes with gold and can be considered valuable, its volatility will not rise sharply like some traditional financial products, nor will it affect its future prospects.

However, some people also point out that Bitcoin itself is a good investment tool. Although it is different from most traditional stocks, the difference between them is that when you sell Bitcoin in your wallet for fiat currency, you will gain more returns than others.

Of course, if you are only speculating, and not using it for speculation, then don’t buy other investment varieties such as Ethereum, Litecoin, etc.

In addition, people often ask if Bitcoin still has a future. How many people are willing to spend money on these altcoins now? The answer is very simple – most people know about altcoins, but in the market, they often behave more like bubbles, or some projects may not exist at all. “Altcoins are a new asset class.”

In fact, since December 2018, Bitcoin has been in a relatively calm state. At that time, investors seemed to be full of fantasies about blockchain technology. “I think this is a complete technological revolution,” but it didn’t actually happen.

According to data from bitinfocharts, as of the end of July, BTC has risen by over 1,000 basis points. (Data source: BitInfoCharts)

However, despite Bitcoin’s rise, it still hasn’t received much favor from institutional markets.

Why Bitcoin Surges

From last night to this morning, Bitcoin’s surge exceeded 20%.

According to data from CoinMarketCap, since November 15th, BTC prices have been rising continuously. In the past week, after briefly falling below $10,000, it started to rebound. According to CryptoQuant data, “Bitcoin’s 24-hour trading volume has reached $1.47 billion”, the highest level in the past two weeks, with trading volume on Binance reaching $7.28 billion; the growth rate of trading volume on Bitfinex is 12.3%.

The reason for this surge is even more unexpected: the Bitcoin market has experienced a wave of frenzy. So what exactly has made Bitcoin so wild? Why has the recent market suddenly risen? Let’s briefly understand:

Firstly, Bitcoin is still in an upward channel and its trend remains strong. In the long term, it is a very healthy asset category. “If the price of an asset continues to rise and experiences a correction or decline, its market value may decline,” said cryptocurrency analyst Willy Woo. “Bitcoin is becoming a new risk hedge tool.” Secondly, “Bitcoin is gradually approaching gold because it is one of the best-performing assets in history.” The third reason is that “as more and more investors enter this field,” he pointed out that although Bitcoin is a highly scarce investment, its volatility is low due to the lack of other investment products for storage and exchange. Finally, the main force behind Bitcoin is the changes in the global macroeconomic environment, which make Bitcoin a safe haven tool.

Another factor is that the U.S. Securities and Exchange Commission (SEC) has approved Bitcoin ETF applications, which is an important move to incorporate Bitcoin into regulatory scope. In addition, the SEC hopes to promote the operation of the capital market by allowing listed companies to hold cryptocurrencies.

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