Bitcoin price surge — reasons that you might have not thought of!
As of 19th of November 2020, Bitcoin is trading at $17,700. Coin Desk reports that Bitcoin is trading at 140% year-to-date gain.
It is no news that the Bitcoin market is in the Bull run ever since the onset of the Global COVID-19 Pandemic. What’s interesting is, contrary to reasonings put forth by other experts, who rightfully point out rising inflation and search for higher yield as reasons behind a rise in the price of Bitcoin. Singapore based trading firm QCP Capital interprets that the surge in Bitcoin Price may well be created by supply crunch as by demand-pull.
The Crypto community is aware that the Chinese Government has been pursuing a nationwide crackdown on fraudulent activities like money laundering and other illicit activities executed by cryptocurrency deals. Last Monday, crypto blogger Colin WU had tweeted that as the Chinese Government was blocking and freezing bank account trading in cryptocurrency, many miners were facing difficulty in paying their electricity bill! Of miners that WU interviewed, 74% were facing difficulty in making electricity bill payments. Chinese miners take-up 70% of the Bitcoin hash rate. They operate in cash and offload their Bitcoin in the market on a daily basis to cover their expenses; a large chunk of which includes electricity expenses. As the authorities seizes bank accounts and raids exchanges, the supply of Bitcoin faces a major predicament.
Another noteworthy fact remains that Bitcoin’s Rally is far from being overheated. Mainly because the funding rate remains steady at 0.010%. Often times when there are price jumps in the market, funding rates take a big jump. However, this has not been the case yet. “The cost of holding a long position is low and we can still expect further drive up in prices to possible record level highs,” CoinDesk states.
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