Posted 2 years ago | by Ben Armstrong
Bitcoin Price Breaks $7,000 USD – May Rise Further
While most of the top 20 cryptocurrencies are showing moderate gains over the past week, Bitcoin has smashed through the $7,000 USD level, and it may have much further to go.
Bitcoin (BTC) has broken the $7,000 mark for its third time within this week. It is currently trading above $7,500 USD, and if the financial markets continue to be stable, it may be able to challenge the $10,000 USD level in May.
There are a few things to keep in mind. Bitcoin appears to be trading as a 'risk asset', which is why its price crashed earlier this year. BTC prices have recovered alongside of other risk assets, like stocks. If we see another round of liquidation, BTC, and the crypto complex may fall rapidly.
Bitcoin Looks Great Long-Term
Alex Mashinsky, the chief executive officer of cryptocurrency lending platform Celsius Network, thinks that the measures proposed by U.S government to stabilize the economy, such as stimulus packages and another government spending, could make investors think Bitcoin looks attractive.
In a tumultuous world economy that is struggling with the coronavirus pandemic cryptos may end up becoming a go to market for safety. For the moment, this doesn't appear to be the case, but we are still dealing with the first moments of the greatest money creation event in human history.
“When everyone gets nervous, they all go to cash, that includes selling Bitcoin, but it’s still one of the best stores of value that exists out there.”
The measures that central banks have taken may weaken the U.S. dollar, which has the potential to push government bondholders into the crypto markets. This might seem like a stretch, given the newness of the crypto complex, but there simply aren't many other options out there.
Not Many Alternative Assets
The last 70 years have seen a push towards the highest levels of global centralization on record. That trend appears to be ripping apart, and as a result, we may see new ideas enter the financial markets with force.
One of the biggest new trends may be that government bonds in the developed world are no longer thought to be a risk-free asset class, as the value of these currencies is becoming extremely suspect. There is no doubt that the US can pay back its debts, but the actual purchasing power of the US dollar in the post-COVID-19 world is a very big question.
Outside of gold and silver, there are very few options for people who want to sidestep the coming fiat currency collapse. Cryptos may be a new asset class, but they offer all the advantages of digital money, with no central banks or governments involved.