EToro CEO Yoni Assia believes there are several factors at play in the crypto-currency market right now, including the economic situation in the United States and the current COVID-19 pandemic.
I think there are a number of circumstances that have led to this historic high, both in crypto and equity markets, Asia told Cointelegraph on Thursday. All over the world we are seeing an unprecedented reaction by governments in terms of monetary and fiscal policy, resulting in zero or even negative interest rates in some places.
In March 2020, bitcoin fell below $4,000 as COVID-19 prevention measures made headlines around the world. Since then, however, the cryptocurrency market has exploded: the price of bitcoin has surpassed $60,000 and the total market exceeds $1 trillion.
We see governments around the world printing an unprecedented amount of money, some of it in the form of a unique and new concept of direct consumer incentive cheques, Assia said. It has certainly sparked the greatest debate in human history about the value of money – a debate that began very passionately in the crypto space, he added, mentioning bitcoin’s scarcity.
The maximum supply of bitcoins is 21 million, but they haven’t all been distributed yet. About every ten minutes, a certain amount of new coins from this distribution is released into the ecosystem to reward miners for their contribution to the network. Over time, however, the number of coins destined for distribution will only decrease; in the past decade, rewards on the blockchain have dropped from 50 BTC to 6.5 BTC. Eventually, the coins will cease to be in circulation, despite the strong and continuing precedent of growing investor demand.
The internal network deficit is a concept simple enough for ordinary people to understand, Asia said, further noting that people are not blind to the excessive printing of money and low interest rates in traditional jihadi markets. He also pointed out that purchases of cryptos and stocks are now more accessible to retail customers around the world, encouraging mass participation from people who might not have participated in the process before.
He concludes that these factors have also led to a resurgence of interest not seen since December 2017. So, since the 1.0 crypto rally, we have not seen as much interest in crypto-currencies as we are seeing now with the 2.0 crypto rally.
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