Why is Bitcoin Going Up? BTC News
The developments in the crypto money markets are the focus of attention of investors. Bitcoin dropped to $ 42,720 yesterday. However, it turned upside down in the afternoon and saw $ 44,810. The daily increase was 2%. While China’s decisions to restrict cryptocurrency mining and transactions force crypto miners to relocate their activities to other countries, countries such as Canada and the USA stand out as new destinations for miners. However, the taxation of cryptocurrencies by the United States is also on the agenda. The decisions to restrict cryptocurrency mining, announced by the Beijing administration in May, adversely affected the activities of miners in the country.
Why Did Bitcoin Rise?
Bitcoin, which saw even under $ 30,000 on July 18, has been on the rise since this date. Bitcoin first slumped to $ 42,720. In the afternoon, this rate increased to $ 44,810. The taxation talks that came to the agenda in the USA were received positively by investors. This caused Bitcoin to rise. According to the Bitcoin mining map prepared by Cambridge University, miners in China, where almost half of Bitcoin mining takes place worldwide, started to move their activities to other countries after the government’s restrictions. The hash rate, the unit of measurement for the processing power of the Bitcoin network, declined to 42% on a monthly average after March, following the decline in mining activity in China. This rate was recorded around 65% in August 2019. While this process, which is called the great mining migration in the crypto money markets, continues, it is stated that the miners have turned their routes to countries such as Canada and the USA.
This is also largely reflected in Bitcoin’s ‘hash rate’. In the said period, the USA stands out as the second country with the highest concentration of Bitcoin miners with a rate of approximately 18%. The USA stands out as an ideal destination for miners with its rich energy resources, low energy prices, and positive attitude of state officials towards crypto money.
While miners in China intensify their communications with companies that provide mining services in the USA, it is known that the Chinese mining company BIT is planning to invest in establishing a data center in Texas. It is stated that the migration of miners will not be instantaneous, it will take some time for them to remove or liquidate their machines from China and start their operations elsewhere.
Experts say that questions about the uncontrollable nature and environmental effects of cryptocurrencies that disturb the authorities in China may also come to the fore in the USA with the intensification of cryptocurrency mining. On the other hand, some experts argue that in the future, special economic zones for cryptocurrencies will emerge that will encourage miners.
Speculative Attack in Bitcoin
Looking at the week in general, the sharpest price movement was experienced in cryptocurrencies. Bitcoin, which broke a record by rising to the $ 65 thousand limits in mid-April, turned its direction down with both Elon Musk’s statements and news from China. With the acceleration of sales in May, Bitcoin drastically declined. This collapse in Bitcoin spread widely and caused an earthquake in many altcoins. The reason why cryptocurrencies have moved in a fragile structure lately is that they are very open to news-based speculation. After Elon Musk said that Tesla will largely resume accepting Bitcoin as a form of payment, movements in cryptocurrencies began. Then, the news that Amazon will accept Bitcoin as a means of payment from the end of the year again caused great movements in the industry.
Although this news was completely denied by Amazon, Bitcoin didn’t lose all of its gains with the effect of this news and tried to hold on. Bitcoin has recorded the longest-running rise of this year, gaining value over and over. Although Bitcoin gained more than 35 percent in this process, it was seen that altcoins could not keep up with this rise.
Investment Supports Coming to BTC
Mastercard plans to integrate a crypto money system for the businesses it serves during the year to use it in their payments. According to the statement on the official website, it was reported that the cryptocurrencies determined later in the year will be supported on Mastercard. Twitter has also started to put Bitcoin on its agenda. Twitter said they could add Bitcoin to their reserves.
Does Supply and Demand Affect BTC?
Supply and demand stand out as the most important reason for Bitcoin prices to change. However, some additional factors affect supply and demand, pushing the price of this cryptocurrency up or down. In this asset, the price is determined only by what market participants are willing to pay. For example, if many people in the industry want to buy Bitcoin, the price of that cryptocurrency will increase, and if they want to sell Bitcoin, the price will decrease. The buying and selling decisions of these people determine the value of this cryptocurrency.
Reasons for Bitcoin’s Price Fluctuation
The price volatility in Bitcoin is to some extent driven by those who own a large percentage of the total currency. Because the volume of Bitcoin resembles a small stock, the currency hasn’t reached the levels that will enable mass-market adoption, which is essential for providing option value to large firm holders.
Also to all these, news about security breaches causes reactions from investors. Since Bitcoin is thought to mean direct security, security problems also directly cause price drops. When the Bitcoin community exposes security vulnerabilities, this is one of the reasons that can bring the value of Bitcoin to a drop. Bitcoin developers must publicize their security concerns to produce robust solutions.
Bitcoin price reflects the confidence level of the protocol design as a whole. Then it would be natural for Bitcoin’s value to fluctuate with news about security breaches. For this reason, it would be the most ideal choice right now to carefully monitor all positive or negative developments regarding Bitcoin, to understand what is going on, where the emerging development will lead, and then to take action.