Why did BTC rise (why did BTC plummet)

Why did BTC rise? Editor’s note: This article is from Xiaonazha88’s casual talk (ID: xiaonazha88), authorized to be reproduced by Odaily Star Daily.

Recently, BTC has become one of the most popular tokens. Its price has increased more than tenfold in October last year. It seems like good news, but we don’t know the exact reason for this upward trend. Why do many people think BTC is so hot? Let’s take a look together:

1. What is Bitcoin?

According to Coinmarketcap data, from January 2017 to the present, more than 100 blockchain projects around the world have confirmed their own digital currencies through transactions. The applications based on BTC include decentralized identity authentication, payment clearing systems, and other application services, most of which use Bitcoin Cash. Currently, only EOS and TRON have received financing of 300 million US dollars each among the top 50 projects in terms of market value. Since the beginning of 2019, the price of EOS has risen from $0.01 to about $0.025, an increase of 1200%. In mid-2019, EOS once reached around $0.054, before falling back to around $0.036.

2. Why is it so hot?

According to bitinfocharts data, as of 6 pm on the release date, “Bitcoin Gold” (referred to as “BTC”) has been continuously rising since late February. Until mid-November, BTC remained at a high level of volatility after falling below $3,000. In early November, it once again experienced a booming market after breaking through the $1,000 mark, skyrocketing. Since then, it quickly returned to the range of $10,000 to $20,000. However, recently, with the unfavorable market conditions, BTC has been in a slow downward trend. Therefore, we need to be vigilant about some risks.

According to cryptonews reports, “Bitcoin Cash” has officially landed on the Bittrex exchange and started trading at the end of 2019. The platform will launch Bitcoin Cash (BCH) and Litecoin (LTC) in the third quarter of 2020, and will also launch the Ethereum 2.0 test network to provide its users with secure storage and transfer functions. “Ethereum Classic” went online on the Bittrex exchange and opened the charging and withdrawal services at the end of August this year. It is reported that Bittrex will support Bitcoin Gold (BTG), Ripple (XRP), and other stablecoins.

Why did BTC plummet?

Recently, the price of BTC plummeted by more than 50% in 24 hours and quickly rebounded. Just a few days ago, someone on the Bitcointalk forum questioned, “I don’t know why this happened? If this is the case, there must be a big problem.”

According to official announcement information, “We have found that a large number of retail investors have purchased BTC”, but these people do not actually own BTC. “This is a strange idea: when you exchange one token for another, there will be an abnormal situation.” According to media reports, some trading platforms have expressed consideration of whether to trade this token as a contract. However, many users believe that this is a speculative behavior that has caused losses.

For most ordinary people, they may not be interested in the name Bitcoin because Bitcoin has no connotation or value support, nor any practicality, and there are no factors such as monetary policy and exchange rate fluctuations. In fact, most people in the cryptocurrency market still hold Bitcoin instead of tokens offered by well-known investment institutions or exchanges, such as Grayscale and Fidelity. Therefore, although many people hold Bitcoin and Ethereum, there is not such a large proportion of price increases in mainstream digital assets, so people are unwilling to believe in such things.

So why is it said that with the recent continued decline in Bitcoin’s market and increased uncertainty in the global regulatory environment, more and more investors are paying attention to Bitcoin itself. In fact, due to its powerful technical capabilities and strong financial knowledge base, Bitcoin has become the preferred safe haven for many people, especially shortly after it was widely accepted as a payment method in China, which caused a high degree of discussion in the market. However, Bitcoin still cannot fundamentally change the world economy.

Although BTC still maintains a relatively strong market momentum, compared with it, ETH is in a clearly weaker position. According to CoinGecko data, the current BTC price is $5.78, nearly an 80% decrease from the previous closing price. In addition, since March 13, ETH has been in a state of high volatility for three consecutive weeks, and this Friday, it once touched a low point of 52.57% of the year; the highest increase since mid-July has exceeded 30%.