Why has the value of Bitcoin increased 700 percent since the start of the COVID-19 pandemic?
Bitcoin is growing, and in the first week of January the value of the cryptocurrency reached almost 40 thousand dollars, doubling in less than a month.
The price of this currency has risen more than 700 percent since the spread of the COVID-19 pandemic for the first time in March 2020.
As Moneyweb magazine explains, the Telegraph reports, such an increase in cryptocurrency was first affected by the risk of economic collapse caused by the COVID-19 pandemic, when governments around the world "flooded" the world market with money from central banks for increase consumption and help the economy.
However, increasing the volume of money reduces their value and forces people to look for other forms of payments that are resistant to inflation, where in this climate, Bitcon has become a "protector" against inflation.
Also, the additional reason is that, Bitcoin is owned by a relatively small number of people - about 2 percent of the accounts control 95 percent of the total cryptocurrency supply. If traded when quantity is small, changes in prices will increase.
Rising demand from investors for cryptocurrency has boosted the value of Bitcoin in early 2021. Demand was boosted by the possibility of faster profits in a world currently dominated by negative interest rates.
"Further growth is inevitable, investors should not expect growth to be direct. The reality is that Bitcoin is far from being a 'magic money tree', nor is it worth declining. In fact, we can expect a drop of up to 25 percent, at a time when investors occasionally withdraw their profits, "said Gavin Smith, CEO of Panxora Group.
According to CoinMarketCap, the current value of this cryptocurrency is $ 35,583.64.
According to the data, within 24 hours its value has increased by over 10 percent, while within a week it is over 35 percent.
Currently the market value of this currency is 955 million dollars, which accounts for about 70 percent of the market of these currencies.