As august winds down, crypto gets fired up. Wednesday saw the largest price hike for BTC in as many as six weeks. Bitcoin is now performing much better than virtually every other asset type, including stocks and commodities. With the Federal Reserve reiterating its stance on money printing at will, and market indicators pointing to an incoming recession, Bitcoin seems to have taken a front seat.
Bitcoin’s price-per-coin rose to just over the $9000 mark from a previous price of around $7700, putting the overall price hike percentage at more than 15%. In contrast, popular stock indexes, such as Standard & Poor’s 500, only saw price increases of nearly 5% overall for the two-day period.
In fact, since the beginning of the year, Bitcoin’s overall price increase now sits around 20% with other popular investment tools coming in much lower. Gold, for example, is now up by approximately 12%. In a similar fashion to gold and other precious metals, Bitcoin is increasingly reclaiming its position as a safety net against fiat instability. While that reputation was tested earlier this year, recent events have brought the idea back firmly for investors and traders alike.
Many now believe that the US dollar is set for an inflationary period, and that it is only a matter of time before we see the resulting recession and other negative effects of such a fiscal state. On Wednesday, Federal Reserve Chairman Powell stated very clearly that the Fed had no intentions of scaling back its money-printing stance when it comes to supporting certain national programs. With his statement, “We won’t run out of money. It’s not a limited pot,” many have now cemented previous concerns that an incoming inflationary period is well on its way. Although Powell does his best to curb these fears, the realities that seem apparent to most are becoming difficult to overlook.
Increasing Bitcoin Demand
Despite all the market turmoil around the world, Bitcoin is looking better than ever. It’s been around 7 weeks since the March 12th price route that was experienced by the entire cryptocurrency market. Ever since, Bitcoin has been on a steady climb and is now about to close the seventh week in a row in the green. It is difficult to see past the volatility at times but BTC’s median prices have been on a steady incline for some time now.
There are of course a few obvious actors behind the increase in Bitcoin value. The third-ever halving event for BTC is right around the corner, for one thing. In just over twelve days, the rewards for mining Bitcoin will be slashed in half which will have a significant effect on supply and demand for the world’s most popular cryptocurrency in terms of market cap value. More demand and less supply have traditionally drove prices through the roof, as would be expected. And, in an effort not to miss the bus, many retail investors have begun buying into Bitcoin to ride the situation out.
There is no way to know at this point whether Bitcoin prices will, in fact, rise as a result of halving. There are certainly analysts on both sides of the fence in terms of which ways prices can go. Some say that BTC is going to the moon while other argue that Bitcoin prices are already dialed in. We will be watching market movements very closely over the next two weeks.