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3 Reasons Why Bitcoin Recently Hit $55K

Bitcoin has reclaimed the $50,000 level again after market players proved that cryptocurrencies have become “too large to ignore”.

The world’s largest digital currency BTC set to rally by a fifth over the past week as more Wall Street banked plunged themselves into the wider crypto-space. Other crypto assets, including Ethereum, BNB and Dogecoin, have also surged sharply.

U.S. banking giant JPMorgan explains on some of the key reasons behind Bitcoin’s rally to a multi-month high of $55,793 in its recent report cited by Business Insider.

1. "The recent assurances by US policy makers that there is no intention to follow China's steps towards banning the usage or mining of cryptocurrencies."

2. "The recent rise of the Lightning Network and 2nd layer payments solutions helped by El Salvador's bitcoin adoption."

3. "The re-emergence of inflation concerns among investors has renewed interest in the usage of bitcoin as an inflation hedge."

Bitcoin's near 35% rally over the past week comes as institutional investors seek an inflation hedge, JPMorgan said in a Thursday note. "Institutional investors appear to be returning to bitcoin perhaps seeing it as a better inflation hedge than gold," JPMorgan said. These are the three drivers behind bitcoin's strong rally over the past month, according to JPMorgan. - BI reports.

Federal Reserve Chairman Jerome Powell made it clear that the central bank has no plans for a China-style crackdown on cryptocurrencies:

U.S. Securities and Exchange Chair Gary Gensler also stated that his own agency neither has the authority nor intends to ban digital assets.

Bitcoin prices rallied through $55,000 to their highest level in close to five months, $55,322.12, CoinDesk data shows.

The price of bitcoin fell back slightly after reaching this level, dropping below $54,000.

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