The delights of a leap year eventually pushed Bitcoin. After responding rather sluggishly to the first wave of the coronavirus, during the second one, the course of the main cryptocurrency showed impressive dynamics and the discouraged investors started talking about the imminent taking of highs. Edgar Jansons, a leading specialist at Trust in BTC (https://www.trust-in-btc.com), answered several questions and clarified the situation.
- The digital market is probably the only one where stable positive dynamics are observed this year?
- Indeed, since March the cryptocurrency market has been steadily moving up. There were moments when the rate sank but the digital gold and the market as a whole always won back the loss quickly enough. Many clients of the Trust in BTC fund, judging by the reviews, thanks to successful investments, are going through the period of the coronary crisis much less painfully. Purely mathematically, the value of the main crypto-coin has tripled and the end of the year is quite possibly preparing new surprises.
- Is it related to the search for alternative assets?
- There is a number of fundamental factors that had a fundamental impact on the dynamics of the exchange rate. First of all, we are talking about macroeconomic reasons. Additional financial incentives from the Federal Reserve System and the US Treasury led to some devaluation of the dollar, and since it is the main equivalent of the value of cryptocurrencies, the rate automatically went up. In the spring the money supply began to grow sharply and this gave a powerful impetus to the digital asset market.
- Are the reasons exclusively economic?
- Of course not. Politically this year has been a very difficult one. Complications in a number of regions have led to an avalanche increase in demand for decentralized assets. There is a very illustrative example of Kyrgyzstan, where the local Central Bank disconnected the country from the SWIFT system. At the same time, there was a sharp increase in the number of new bitcoin addresses.
- We observe a similar situation with the clients of the Trust in BTC fund: many of them became active this year. The lack of control and freedom of transactions makes cryptocurrency, despite the potential volatility of the exchange rate, an attractive asset for investment in volatile times. In addition, one should not forget about the limited number of coins and the impossibility of additional emission, which in itself in the long term is the basis for increasing the value of coins.
- It turns out that bitcoin and cryptocurrencies in general have successfully integrated into the global financial system and become its integral part?
- It is premature to talk about full integration, there is opposition to cryptocurrencies and it will grow. However, we can say with confidence that the digital market has occupied its niche and its existence will have to be reckoned with. Crypto-skeptics are failing, obviously. The financial mastodon JP Morgan, who was recently critical of the prospects of bitcoin, includes it in the list of investment assets on a par with gold. The thousand-year monopoly of the precious metal as a store of value has been shaken by an asset that only a handful of computer geeks knew about a few years ago. In my opinion, this is one of the biggest surprises of the 21st century.
- Do you have any doubts about the “bright future” of bitcoin?
- I would not call this future bright and cloudless, we always try to convey this idea to the clients of the trust in BTC fund, but digital gold has a very good growth potential in the near future. Instability is growing in the world, regulators are making significant cash injections into the economy in order to somehow cope with the crisis provoked by the COVID epidemic. All this leads to a weakening of national currencies and a demand for defensive assets, and those of them that not only preserve invested funds, but show stable growth, will be in particular demand. Despite the optimistic statements of a number of statesmen, the situation in the world is still very far from improving, which means that the existing trends will continue for a long time. Of course, this is not very good for the world, but Bitcoin will strengthen.
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