After all the worry and concern that has been meandering throughout the space, bitcoin has again crossed the $12,000 threshold for the second time in just weeks.
It’s $12K All Over Again for Bitcoin
The last time bitcoin hit this figure was in the middle of August. Sadly, the price switch didn’t last. It rose all the way to $12,400, but bitcoin was not able to keep up the momentum and fell back into the low $11,000 range a few days later. It’s relatively impossible to assume what will happen this time around. Will bitcoin manage to retain its new and improved figure, or will things take another turn for the worse? Will the world’s number one cryptocurrency by market cap take another massive stumble?
At first glance, perhaps things are beginning to turn around for the coin. Fed chair Jerome Powell has stated the U.S. is going to permit an increase in the national inflation rate. Initially, this ultimately brought the price of bitcoin down given that people began to worry about what kind of global repercussions the move would have.
The United States, after all, still has its finger in multiple financial pots around the world. There are many countries – not just the U.S. – that depend on the stability of the dollar, so if the currency is being allowed to devaluate even more than it has been in the past, this would potentially bring the western monetary system to its knees.
But while the U.S. is permitting the annual inflation rate to rise just above two percent – the normal average during times like this – the effects may prove positive for bitcoin and other forms of crypto in the long run. A weakened dollar sets the stage for a strong an effective digital currency space. People are likely to view bitcoin even more as a “safe haven” asset and will likely turn to it – along with assets like gold – to potentially ensure their monetary strength and keep their wealth hedged and strong during times of economic strife.
Inflation Could Work in the Long Run
This is the sentiment among analysts such as Simon Peters of e-Toro fame, who in a recent interview, commented that an economic environment wrought with inflation and other harsh circumstances could potentially give bitcoin a chance to rise beyond anybody’s initial predictions. Over the past few days, bitcoin has certainly picked up the pace, rising from the low $11,000 range to $11,600 and $11,700 respectively, a figure it achieved only 24 hours ago.
Today’s rise beyond the $12K line marks a surge of more than $300 in just a single day, which is certainly good news and a great start to the new month, though it may be a bit too early to break out the champagne. The smart thing to do at this point may be to keep an eye on bitcoin and make sure it sustains this new energy before celebrating its triumphant return to form.