Bitcoin jumped to another new all-time high breaking the $35,000 mark with other cryptocurrencies like Ethereum following its lead. Let’s look at its current value and try to understand why cryptocurrencies are at their highest.
In March 2020, almost every market crashed when the world went into lockdown due to the coronavirus pandemic. Even cryptocurrencies weren’t spared the panic. The world’s largest cryptocurrency bitcoin dropped to a 12-month low in overnight trading. However, fans of cryptocurrency were the first to rejoice as it was the first one to bounce back.
As of 6th January 2020 bitcoin has risen to a high of $35,879. If you had invested Rs. 37 lakh rupees at the time when markets were crashing across the world and had bought just one bitcoin, that one BTC would have been worth nearly Rs. 26 lakh. This is almost a 7x return in a short span of nine months.
Bitcoin has been on a bullish rally for a while and has risen as much as 6% to $35,879( Rs. 26 lakh approximately). This value has surpassed the previous high of $34,792(Rs. 25 lakhs approximately) that was set just a day before on January 3.
The daily trading volumes in cryptocurrencies too hit the highest high of $69.3 billion( approximately. 4,99,600 crores) according to the data from CryptoCompare. This is a staggering high, especially when compared to the average overall daily trading volume of cryptocurrency in 2020 which was $13.1 billion(approximately roughly Rs. 95, 800 crores).
Ethereum, which is the second-biggest cryptocurrency after bitcoin also hit its highest value since 2018 with $1,170(Rs. 85,600). It should be noted that Ethereum works in tandem with bitcoin, and thus, can get on a bullish rally itself.
Why Is Bitcoin and Cryptocurrency at its all-time high?
Governments across the world have flooded the capital markets with money in order to give spending a boost. This move can be seen as a response to the looming risk of an economic collapse due to the COVID pandemic.
But the simple concept of supply and demand suggests that an increase in the supply of money would lead to its decline in value(also known as, inflation). This creates a panic in the masses and leads people to look for inflation resistant assets. Over the years, Bitcoin has become one such asset. Because Bitcoin is in limited supply and can be only supplied till its 21st millionth unit, its prices keep ascending.