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The virtual currency climbs more than 50% in October, to a historical record above $66,000. The reasons for an explosive increase
The rise of Bitcoin is once again on everyone’s lips, in an upward movement of 52% during October that surprises the financial world.
Bitcoin was traded at USD 66,700 on Wednesday afternoon, with a gain of 7.6% on the day and in the historical record zone, after breaking the highs of mid-April, when it touched $65,000.
“Bitcoin at its all-time high is highly correlated with what happens in the US Equities market. There is a certain possibility that if equities continue to rise, it will lay the foundation for bitcoin to make its run (what is called Blow-Off Top ),” Juan Pablo Thieriot, CEO of Uphold, told Infobae.
“The two events represent a reaction to the lack of confidence in central banks regarding inflation control. That is, the rise of Equities and Bitcoin is a dollar off bet (bet against the dollar) and these two events are correlated. If Equities continue to rise, Bitcoin has a very good chance of making its big jump. If we see the US Equities markets start to cool down, I think it will continue to trade in the area where it is currently. We believe that Bitcoin should reach $100,000 near the end of the year,” Thieriot highlighted.
Behind the renewed boom in Bitcoin, which is not exempt from strong volatility, three reasons can be identified:
1) The emergence of an ETF on Wall Street. Bitcoin began to play this Tuesday in the “major leagues”, through an investment instrument that is traded and listed on the New York Stock Exchange, the main financial center.
BITO , the first cryptocurrency futures exchange-traded fund (ETF) in the United States, gained 5% on its first day of trading and is advancing 9% this Wednesday .
Bitcoin approaches USD 67,000, to break the previous mark of USD 64,895 from April 14
Trading in the ProShares Bitcoin Strategy ETF is an initiative that market players are confident will increase investment in the digital asset. Maximiliano Donzelli , Head of Research at IOL (InvertirOnline) highlighted the advantages of investing in this type of assets:
– Security: this is the main advantage and it is overwhelming. This fund operates within a regulated market, unlike the wallets where cryptocurrencies are stored and exchanges, whose operations lack regulations.
– Correlation: it is a good way to gain exposure to the cryptocurrency market, without having the need to acquire the underlying assets directly.
– Simplicity: it is not necessary to use other platforms or virtual wallets, since it can be operated like any action from the same platform.
– Storage: to store cryptocurrencies safely, you need to have encrypted accounts, as well as a private key. If you forget the private key credentials, or if the key is revealed to others, there is no possibility of recovering the assets. By operating these instruments through ETFs we avoid these types of difficulties.
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