The secret of the rocket rise of the coin "Bitcoin".. And expectations for the future
Happy day for crypto investors, as the price of one bitcoin reached more than دولار 30,000, a record that the currency is surpassing for the first time.
At 14.13 pm Paris time, on Saturday, bitcoin was worth دولارا 30,823.30, according to data compiled by Bloomberg. The virtual currency had crossed the دولار 20,000 threshold for the first time on December 16.
The recent Bitcoin News has left behind questions about why the currency has soared over the past days,and about the future of the cryptocurrency.
Programmer and technology journalist Hala Nasrallah explained to Al-Hurra why bitcoin has risen in recent times, mainly due to the economic crisis caused by the corona pandemic, which has shaken cash around the world.
"Criticism was shaken in a number of countries, and people wanted to resort to a safe and well-known alternative like bitcoin, which is similar to what happened after the 2008 economic crisis in the United States,"Nasrallah said.
"Second, the number of digital wallets has increased dramatically, which has increased the percentage of crypto trading, not just bitcoin. The third thing about the reason for the rise of bitcoin is the element of scarcity, with only 21 million bitcoins, of which 18 million units have been issued so far, that is, the increase in demand versus the advantage of scarcity, has led to an increase in their price, " explains Nasrallah
Digital wallets are wallets dedicated to cryptocurrencies, and may be in the form of a device, software, or service in which you can store cryptocurrency, and conduct transactions.
Nasrallah pointed out that bitcoin is an ideal solution for countries experiencing economic crises during the recent period, and has been resorted to by peoples such as the Turks, who have become pioneers in bitcoin, as well as people experiencing economic difficulties due to sanctions, such as Venezuela, Brazil, and even in Lebanon.
Nasrallah also noted the increasing circulation of bitcoin by some Arab peoples, such as Syrians, Palestinians, and Iraqis, calling it "very interesting."
The fourth thing that has led to the rise in the price of bitcoin, Nasrallah says, is that a large number of companies have started to convert part of their budget to bitcoin, including Square.
Square Financial Services had bought about 4,700 bitcoins, when the price of one coin was worth دولار 18,000.
The crypto programmer also noted that the German Federal Bank has concluded an agreement with ocean token for smart contracts, adding that in 2020 we have seen "the collapse of centralization versus decentralized economies."
"We are seeing major companies turning to cryptocurrencies and financial tokens called tokens," Nasrallah told Al-Hurra, adding that from the perspective of economists and corporate experts, bitcoin will see sustainable growth.
What is the future of bitcoin?
On the possibility of future price rises, technology journalist and former editor of crypto-currency website bitchain, Mustafa al-Sayed Hussein, believes that it depends on many variables.
"No one knows the answer to this question with certainty, and in the event of an economic crisis due to the effects of Corona as expected, the crisis will create a crisis of confidence in traditional economic institutions, such as banks," says Hussein.
"This will necessarily give momentum to alternative markets, most notably cryptocurrencies, for example, last year we saw the crisis of Lebanese banks and the dramatic decline in the Lebanese pound exchange rate, which led to a sharp rise in the popularity of cryptocurrencies in Lebanon, such as bitcoin."
"Imagine a major global crisis compared to (the previous example), and of course this will be a strong indicator of the continued rise (of the price of cryptocurrencies), on the other hand, some countries may be heading for greater restrictions in return by legislation and this may negatively affect prices, these are the two most important variables that may affect the price of the
Analysts told CNBC that the rise in the price of copper was also a major factor in bitcoin's recent rise.
Analysts at Goldman Sachs said bitcoin and copper prices had experienced several fluctuations this year before hitting record highs with the coronavirus pandemic.
Copper has a good reputation as a barometer of the global economy due to its wide range of end-uses, both in the construction sector and in consumer goods such as automobiles and electrical appliances.
The growing popularity of bitcoin has led to it becoming a widely traded asset, like powerful traditional currencies.
Although Bitcoin and copper prices are set to rise in recent months, analysts at Goldman Sachs said they believe bitcoin and gold will be able to "coexist."
"Gold's recent weak performance against real rates and the dollar has left some investors worried that bitcoin is replacing gold as a hedge against inflation,"they explained.
"While there is some substitution going on, we do not see bitcoin's rise in popularity as an existential threat to gold as a currency of last resort."
"From our point of view, bitcoin is a retail deflation moneymaker, while gold is a defensive asset to maintain real capital over the long term,"the bank's analysts added.
