crypto is back up but where does it go next?
crypto is back up but where does it go next?
crypto is back up but where does it go next?
in the first few months of this year, very few things dominated headlines like Bitcoin and cryptocurrencies. their meteoric rise seemed to have no limit, and everyone from your favourite influencer to the richest men in the world seemed certain they would make you a millionaire. then came the reality check, kicked off by concerns over their environmental impact and continued by a reconciliation of their valuations with ground reality. now, it appears, investors are daring to dream again.
sweet dreams are made of this
Bitcoin has rallied close to 40% over the past few days. after dropping below $30,000 a token, many thought it would plunge. instead it has seen a rebound to heights not seen in months. one of the biggest reasons is rumours of Amazon soon accepting payments in cryptocurrencies. these were sparked by a job posting, and despite an official denial, were sufficient to revive flagging spirits.
self-proclaimed ‘Dogefather’ and Tesla-CEO, Elon Musk, also recently said the electric vehicle maker could soon start accepting Bitcoin again. Ark Investment, led by CEO Cathie Wood, has filed an application to create a Bitcoin exchange-traded-fund, Twitter and Square CEO Jack Dorsey creating a platform for building Bitcoin-based decentralised finance applications.
but for how long?
Bitcoin is still a way off from its all-time-high of around $65,000 a token from earlier this year. however, the community is making sure it doesn’t take another tumble, at least for the same reason: using coal for running the network, i.e. mining. following China’s crackdown on Bitcoin mining using coal-based electricity, the process now reportedly consumes more than half its requirements from green energy.
Of course, it’s also now legal tender in El Salvador, which is setting up mining operations based on (eco-friendly) volcanic energy. many other Central and South American nations are following its lead.
in India too, the government has abandoned its proposal to ban cryptocurrencies in favour of regulation. the RBI has confirmed plans to introduce a central bank digital currency, which indicates an acceptance of the underlying technology. Indian retailers such as The Rug Republic are starting to accept payments in crypto. all of this means demand will increase again.
so you may think that crypto fans are dreamers, but they’re not the only ones.
a word of caution: the US Senate’s bipartisan infrastructure deal is looking to tighten tax reins on cryptocurrency trading to offset costs. keep an eye out.