Market Elements Influencing $8.8 Trillion Crypto Trades in Q1
During the first quarter of 2020, the cryptocurrency market traded a grand total of $8.8 trillion in spot and futures markets as according to a news report on Bitcoin.com. Even with the likes of Warren Buffet disagreeing with cryptocurrency’s potential, volume of $8.8 trillion on any commodity is definitely worth revisiting. Bear in mind that Warren Buffet’s stance has always been to not invest in things he does not understand.
By that notion, let us help you understand what is happening to ensure you make an informed decision on your trading options. Here is a brief overview of why we are seeing such trading volumes in the past few months.
Bitcoin was usually invested by individuals looking for alternative investment opportunities and have a higher risk tolerance. That has changed recently as more institutional investors have changed their outlook on the cryptocurrency markets . According to Forbes, even countries like China are looking to introduce their own government backed cryptocurrency in the near future and are likely to keep boosting investors confidence in such a commodity.
Image Source: Bitcoin Exchange Guide
US stimulus cheques going to Bitcoin
The COVID-19 pandemic has wreaked havoc to the world’s economy, but it has brought in more buyers of Bitcoin. The US government gave stimulus checks worth $1,200 to its citizens and they in return used it to buy Bitcoins and other cryptocurrencies. In another report by Forbes, a Bitcoin subreddit saw many posts claiming that more Bitcoins were bought using the stimulus money. These purchases indicate to traditional currencies not being trusted to hold its value and Bitcoin given the precedence and trust as a better store of value during these trying times.
Image Source: news.bitcoin.com
Bitcoin halving and general interest on the event is rising as people are expecting its prices to move upward with smaller number of bitcoin being generated with each block, hence leading to a smaller supply available. Google Trends recorded a growth in search of the Bitcoin halving topic from the previous months, with CEO of Digital Assets Data mentioning that it suggests an “increase in retail interest”. In addition, searches in relation to Bitcoin purchase has also been on the rise.
Image Source: datadriveninvestor.com
How to Trade BTC
With Bitcoin recently breaking past $7,000 and gradually pushing its boundaries passed the $7,500 mark at the time of writing, Bitcoin has been on a steady rise since 13th of March 2020 where it went as low as $4,000 and bounced back within a month. Bitcoin is outperforming major US banks and some experts believe the rally may continue.
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