Bitcoin price flirts with $9,000 mark ahead of halving event
Last week the price of Bitcoin (BTC) moved from $7,700 to hit a $9,300 high before seeing a correction to drop below $8,700. Ether (ETH), the second-largest cryptocurrency by market capitalization, moved in a similar pattern, starting the week at $195 and reaching a $226 high, before dropping back to $201.
Bitcoin saw a significant surge in price shorly agter Federal Reserve Chair Jerome H. Powell explained what the central bank of the United States is doing and what it is prepared to do to help the country fight the economic impact of the COVID-19 pandemic. In a question and answer session following a press conference, Powell explained that what the Fed is doing is different “from the PPP that paycheck protection program” as the bank is issuing loans, not grants. He added:
“And the second thing is we won’t run out of money. You know, it’s not a limited pot. So, there won’t be this incentive to try to get there first and that sort of thing.”
Powell also admitted that debt is growing faster than the economy and that the Fed would keep benchmark U.S. interest rates close to zero, while reaffirming that it will continue buying U.S. Treasury bonds and other assets in an unbounded amount to keep the markets functioning smoothly.
Bitcoin’s price has quite closely tracked equities in recent months, but is still viewed by many as a hedge against inflation and currency debasement thanks to its hard cap and stable inflation rate. This month Bitcoin will undergo a halving event that will cut its inflation rate in half. Various analysts see the halving as bullish, as a drop in supply should lead to price growth, if demand remains unaffected. Others suggest the halving is already priced in.
Notably, data from CryptoCompare shows searches for the term “bitcoin halving” eclipse the volume of searches seen around the last bitcoin halving event.
Facebook-led Libra Association last week added British payments startup Checkout.com as its latest member. It’s the first payment processor to join the organization after giants like Visa, Mastercard, PayPal, and Stripe decided to leave the project after it drew ire from regulators.
Regulators expressed concern that its initial plan to launch a global cryptocurrency backed by a basket of fiat currencies and short-term U.S. Treasury bonds could heavily disrupt the financial system. The Libra Association has since announced a shift in strategy to support cryptocurrencies pegged to the value of governments’ currencies, and added new members including e-commerce giant Shopify and crypto brokerage firm Tagomi.
Cryptocurrencies Will be Around in 10 Years
BitFlyer Europe, the European arm of the popular cryptocurrency exchange bitFlyer, has published the results of its yearly Crypto-Confidence Index. These showed that two-thirds (66%) of Europeans believe cryptocurrencies will still exist in 10 years, up 3% from last year.
The exchange noted the results show growing confidence in cryptocurrencies, despite the “crippling effect” the coronavirus had on the global economy. Italy, one of the countries most affected by the COVID-19 pandemic, was seemingly the most optimistic on the future of cryptocurrencies, while the U.K. was the least optimistic.
Andy Bryant, COO at bitFlyer Europe, noted:
“Although we might look at this as an achievement for digital currencies in spite of the challenging economic times we are facing, it is also worth considering that this may well be partly because of these times.”
Last week cryptocurrency mining hardware maker Ebang filed for a $100 million initial public offering (IPO) in the United States, according to a filing with the Securities and Exchange Commission (SEC). The Hangzhou, China-based firm is aiming for a listing on the New York Stock Exchange or on Nasdaq, under the EBON ticker symbol.