Bitcoin has just broken a new record. For several weeks, the cryptocurrency's price has been on an upward trend. Buoyed by Donald Trump's relaxation of US customs duties, Bitcoin climbed back above $100,000 at the beginning of the month. During the night of May 21-22, the price finally surpassed $110,000. With this new phase of growth, Bitcoin beats its previous record from last January. The crypto had indeed approached $109,000 in the wake of Donald Trump's inauguration.
Bitcoin's surge benefits all digital assets. Electrified by Bitcoin, the entire valuation of the ecosystem has risen above $3.5 trillion. Ether has climbed beyond $2,500, up more than 40% over the month. However, most altcoins are not currently enjoying the same success as Bitcoin. For Simon Peters, market analyst at eToro, Bitcoin's new record is "perhaps just the beginning of something much bigger."
The causes of Bitcoin's new record
Bitcoin's record is based on a series of factors, starting with the miners' accumulation strategy. Mining giants are accumulating bitcoins instead of selling them for dollars. Since last month, miners have stockpiled nearly 3,000 bitcoins. This strategy has helped increase Bitcoin's scarcity, resulting in an increase in its value.
Bitcoin can also count on the continued success of Bitcoin-based Exchange Traded Funds (ETFs) in the United States, which made a sensational debut on Wall Street last year. These index funds continue to generate huge amounts of money, in a context in which American authorities are becoming increasingly open to cryptocurrencies.
De facto, more and more institutional investors are turning to ETFs. The initiatives of Donald Trump, who officially supports the cryptocurrency industry, are having a positive effect on the sector's appeal. At the same time, "retail investors are re-entering the market amid inflation fears," says Utkarsh Ahuja, principal at Moon Pursuit Capital. Antoni Trenchev, co-founder of the exchange Nexo, said the rise was driven by "a range of favorable ingredients," such as "softer U.S. inflation figures and a de-escalation in the U.S.-China trade war." Speaking to CNBC, he believes digital currencies could thrive for "a three-month window." Analyst Samuel Shiffman agrees, reports CoinDesk. He believes that "we probably have room to run until June and early July before things start to change."
According to analyst Simon Peters, several factors are likely to push Bitcoin's price even higher in the coming months. He cites, in particular, an increase in "global liquidity", or the amount of money available in the global economy, which is expected to increase over the course of the year. In this context, blockchain analyst Burak Kesmeci is starting to point to Bitcoin rising above $127,000 or $159,000.
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