In two days, the main cryptocurrency grew by 20%, despite a mining ban in two Chinese provinces and criticism of digital assets from US Senator Elizabeth Warren. Experts explained what is happening with the crypto market and what is the reason for its growth?
The last two days, bitcoin quotes are growing steadily. The coin has already added in price about $ 7 thousand (20%), and its capitalization again exceeded $ 700 billion, the digital coin is trading at $ 37.8 thousand. Experts explained that it pushed the bitcoin rate up , and what factors can restrain its growth.
Growth reasons
Positive news from El Salvador and recommendations on bitcoin for banks from the Basel Committee, which indicate the de facto recognition of cryptocurrencies at the global level, helped the digital coin “return to the game”, says Mikhail Karkhalev, financial analyst at the Currency.com crypto exchange. According to him, for bitcoin in recent days, the main task was not to fall below the support range of $ 32-37 thousand, with which he coped well.
In the near future, the main cryptocurrency can break through the level of $ 40 thousand, and its price will gradually begin to recover, says Mikhail Karkhalev.
On June 9, the crypto market reacted with growth to the decision of the Parliament of El Salvador to recognize bitcoin as legal tender on a par with the US dollar. Acceptance of digital coins for payment will become mandatory in the country. Also, the authorities of El Salvador are planning to create an official crypto wallet, and will store bitcoins in it in the amount of $ 150 million.
El Salvador‘s President Nayib Bukele instructed the state-owned energy company LaGeo to start mining bitcoins using “cheap, 100% clean and renewable energy from volcanoes.” LaGeo operates two geothermal power plants.
At the same time, the Basel Committee on Banking Supervision warned banks that they must have sufficient reserves to cover possible losses from investments in bitcoin.
Constraints
Despite the positive developments, the news background has not changed fundamentally for cryptoassets, says Artem Deev, head of the analytical department at AMarkets. According to him, at the moment, China and the United States are the most important platforms for cryptocurrencies, so the news coming from these countries is of great importance for the market.
“There are no special prospects for the growth of bitcoin and other coins yet – pressure on the market from the authorities of developed countries continues,” explained Artem Deev.
The analyst recalled the harsh statement against cryptocurrencies by US Senator Elizabeth Warren, who called digital currencies a haven for illegal activities, as well as a “lousy investment.”
On June 8, two Chinese provinces at once banned the mining of cryptocurrencies on their territory – Xinjiang and Qinghai . The Chinese authorities called for stricter regulation of crypto trading and mining last month . Because of this, large digital coin mining companies began to leave the Middle Kingdom and transport equipment to other countries.
If new negative statements appear in the near future that bitcoin may fall below $ 30 thousand, Artem Deev believes. In his opinion, the fall of the asset depends on the scale of the initiatives of the governments of different countries. During this crash, the analyst recommends buying bitcoin, as in the long term, the coin will return to growth and be able to surpass this year’s records.
“Blockchain and cryptocurrencies will develop in any case, because this is the future of world finance,” added the head of the analytical department at AMarkets.
