Bitcoin quietly crept over the powerful $30,000 level, yesterday and for the second time in the last few weeks. Bitcoin is up more than 80% this year. But why?
Here are the 3 main reasons:
1. Falling interest rates
In 2022, rates increased and Bitcoin fell. Money goes where money is treated best. Trillions of dollars went into safe assets like bonds, CDs and even money market accounts. Bit this money won’t stay there forever. With rates falling in recent weeks, there is plenty of evidence that large amounts of that cash are already moving and much of it is moving back into crypto. It makes sense. Remember, money goes where money is treated best!
2. Regulation talk
The recent clashes between crypto and the Securities and Exchange Commission (SEC) have been good for Bitcoin. Some smart regulation could be positive for unconventional crypto and open the doors to big-money players.
3. Trouble in the banking sector
Over the last weeks, huge amounts of money have flown out of smaller regional banks and into big institutions. Deposits at large banks have grown by $120 billion. But a good portion of it has certainly moved into crypto, especially Bitcoin, the biggest of them all. Again, it makes a lot of sense. If the banking sector is in trouble why not put some of the hard earned money into alternative assets?
There might be a very good year 2023 for Bitcoin in the pipeline. It could be huge. May be it is time to get your “play money” out and put it to work.
Sven Franssen