Cryptocurrency market volume jumps $35 billion in 24 hours led by bitcoin surge
The entire market cap or value of cryptocurrencies jumped $35.3 billion in 24 hours.
Bitcoin was at $9,388.30 – up 18.57% in the last 24 hours at 2.03pm Singapore time.
Industry participants attribute the rally to two factors – central bank monetary policy, as well as the upcoming event known as the bitcoin halving.
Cryptocurrency prices soared on Thursday, led by a big jump in bitcoin.
The entire market cap or value of cryptocurrencies jumped $35.3 billion in 24 hours as of 2.19pm Singapore time, according to data from CoinMarketCap.com.
Bitcoin, which accounted for the bulk of the move, was at $9,388.30 – or up 18.57% in the last 24 hours at 2.03pm Singapore time, Coindesk data showed. That was the highest level since March 7.
Cryptocurrencies are seeing two big battles of selling the Market amidst wider freedom in the equity markets. But now they have found the reason.
Industry participants attribute this to two factors – central bank monetary policy as well as the upcoming event known as the bitcoin halving.
Major central banks around the world have rolled out massive stimulus packages to cushion the economic fallout from the coronavirus pandemic.
They also signaled their willingness to do more. This has been a factor behind the recent gains in the stock market in recent days, and has been filtered down to bitcoin and other digital currencies.
“My feeling is that the market as a whole does not reflect the reality on the ground, but this is also a result of the Fed in the US being very clear that they will do whatever it takes to ensure there is economic stability,” Vijay Ayyar, head of business development at cryptocurrency exchange Luno , told CNBC.
He was referring to the US central bank’s pledge to keep its benchmark interest rate near zero until the economy recovers.
“We could see a lot of money flowing into equities and crypto as well, as a result of printing new money.”
An event known as the bitcoin “halving” is taking place in May. It deals with changes that have been programmed as part of the basic bitcoin technology known as blockchain.
The bitcoin world works with so-called “miners” with high-powered computers competing to solve complex math problems to validate bitcoin transactions. Whoever wins the race will be rewarded in bitcoins.
Currently, miners are rewarded 12.5 per block mined. The payoff is halved every few years to keep inflation in check. In May 2022, the reward per miner will be cut in half again, to 6.25 new bitcoins.
This essentially reduces the supply of bitcoins entering the market. Halving is an event that occurs every four years. The previous halving event had preceded the big bitcoin price hike.
“While part of this rebound can be explained by the renewed ‘risky’ attitude of investors, it is also clear that the bulls have been fueled by the impending halving and the anticipated appreciation in value after that,” said Matthew Dibb, co-founder of Stack, a provider of bitcoin index funds.
“For those who are buying bitcoin now, many see this as an opportunity to buy BTC at a low base price before the post price halves.”