EURUSD is on track for a huge weekly gain before US elections results
EURUSD rose on Friday to continue its gains for the fourth consecutive day, approaching a…
Bitcoin once again topped the headlines and Coinbase investor and expert interest, after a period of relative stability, as it made record highs this week, bringing it to an all-time high above $48,000 on its way to over $50,000. So, what’s the story behind that?
Initially, Bitcoin exploded to a new record high on Monday after Tesla revealed that it had bought $1.5 billion worth of cryptocurrency in January.
The main cryptocurrency reached $44,900 on Monday from the level of $ 38,800 in its strongest daily performance in more than three years. As investors rejoiced at the entry of the fifth largest company on Wall Street in the cryptocurrency sector, and some expect the currency to continue its upward momentum until the price reaches $100,000, in light of growing demand in exchange for a limited maximum supply of the leading currency of 21 million units.
Tesla involuntarily unleashed a similar wave of credit in its deposit with the Securities and Exchange Commission, as the leading electric vehicle maker said it was changing its investment policy to use its cash reserve reserves to buy “alternative reserve assets” such as Bitcoin.
Moreover, Tesla added that it may begin accepting digital currency as a payment method for the purchase of its future products according to various laws and will be limited initially.
Many analysts agreed that the news of Tesla’s adoption of Bitcoin has indirectly validated the cryptocurrency price target of 50,000 in the short term, and one analyst said that Tesla may be the catalyst for the market value of the leading currency to reach $ 1 trillion.
The company’s disclosure of investment and acceptance of the leading digital currency as a payment method is a similar starting point for PayPal’s introduction of cryptocurrencies on its platform in October, which will likely bring it to $50,000.
The currency continued its bullish momentum during this week. After, rising above $44,000 following Tesla’s news, it jumped above $48,000 during trading on Thursday, continuing its bullish momentum driven by a series of positive news, as MasterCard announced that it will allow its clients to accept payments made in cryptocurrencies later this year, while BNY Mellon revealed its intention to launch cryptocurrency and other custody services for institutional players.
The two announcements caused an improvement in market sentiment around Bitcoin, which was already at a high point after Tesla’s purchase of $1.5 billion BTC.
On the other hand, Bitcoin showed new signs of rising after the continued flows of stable currencies to the exchanges. When stable currency flows to the exchanges increase, this indicates that the marginal capital is returning to the Bitcoin currency.
Hopes are still growing in the long term about the future of the digital currency, as investors continue to evaluate the stimulus proposal of US President Joe Biden of $1.9 trillion, and many of them expect the US dollar to head for a further decline after Congress approved the expansionary Coronavirus aid. In turn, it would push more of the major companies sitting above billions of dollars in cash reserves to reallocate a portion of Bitcoin.
Since companies adopt cryptocurrency as a reserve asset for treasuries on their balance sheets, they replace non-performing assets with the best performing assets, preferring volatile rallies over stable consumption, ”said Michael Saylor, CEO of MicroStrategy, which has more than 72,000 Bitcoins in its reserves.
Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.
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