You probably know that Bitcoin has a finite supply. This means that only 21 million Bitcoin are allowed to be in existence. Hence, the value of this cryptocurrency depends highly on this key factor. Despite all the uncertainties which surrounded Bitcoin ever since its beginning, the cryptocurrency has kept rising. In fact, it has doubled in 2019.
This extraordinary growth has caused food for thought. As a result, many investors, as well as, common people started wondering why is Bitcoin rising. As this question doesn’t have a simple answer. Let’s try and have a look at some of the possible reasons for pushing the price of this cryptocurrency higher.
Stock Market Fear
One of the possible reasons seems to be the stock market fear. In fact, the adoption of Bitcoin as a store of value has been promoted due to the current economic climate. Many economists have suggested that this rise will come to an end as this year ends. They even started urging the Federal Reserve to preemptively lower interest rates. As a result, many investors decided to reach store-of-value assets to hedge against loss. This has consequently popularized Bitcoin which offers a simple store-of-value investment. Nevertheless, there was a 3.2 percent rise in the first quarter, which was an unbelievably strong growth number.
Changes in the Financial Policy
The current Bitcoin price rise has also been indirectly helped by the United States government. Hence, the Federal Reserve started changing the financial policy and the interest rate policies have left something to be desired. Many people started wondering how autonomous the Federal Reserve in holding the reigns of the economy. Additionally, quantitative easing and modern money theory economics started doubting investors. However, Bitcoin stands intact from all these events and changes as it is an independent currency. Bitcoin isn’t tied to federally regulated fiat currencies.
The Fundamentals of Bitcoin Might be the Reason
On the other hand, the fundamentals seem to be quite different and they play a crucial role in the price of Bitcoin. Inflation started increasing and substantial volatility began entering the markets. The users of Bitcoin continued growing and became global. In fact, Bitcoin has become a go-to currently. What’s surprising is that this started even in countries where national banks have destroyed currency values. Such countries are Argentina and Zimbabwe. In the developing countries, the transactions started going up which triggered the increased demand and increased price.
What Does the Future Hold for Bitcoin?
It looks like the future of Bitcoin is quite bright, especially as there is a possibility of the fiat systems potentially imploding. This cryptocurrency will continue growing in the upcoming months. As there are many changes in the economy and policies in many countries around the world, such as the USA and the UK, it probably means that many people will turn to Bitcoin as their safe port in a storm.
The demand for this cryptocurrency is expected to rise and if that happens, the prices might increase significantly in the long term. Visit BitcoinChampion if you want to embark on the whole Bitcoin journey and profit from its bright future.