#Bitcoin #Bitcoin #Anfelia_Investment #BTC #blockchain
Cryptocurrencies are digital assets that function as a medium of exchange, based on cryptography and blockchain technology. Some of the main cryptocurrencies are Bitcoin $BTC , Ethereum $ETH , Binance Coin $BNB , Cardano, Solana, among others. These cryptocurrencies have experienced a significant increase in their prices during the year 2024, reaching new all-time highs. What factors explain this phenomenon?
One of the factors driving the rise of cryptocurrencies is the expectation of greater adoption and integration into the traditional financial system. For example, several Bitcoin exchange-traded funds (ETFs) have filed for approval with the U.S. Securities and Exchange Commission (SEC), which could make it easier for institutional and retail investors to access the asset¹². Likewise, some countries such as El Salvador have adopted Bitcoin as legal tender, while others such as Brazil, Uruguay and Paraguay are studying the possibility of doing the same³.
Another factor contributing to the rise of cryptocurrencies is the perception that they are a safe haven from economic uncertainty and global inflation. The covid-19 pandemic has generated a global health, social and financial crisis, which has led governments and central banks to implement unprecedented fiscal and monetary stimulus measures. These measures have generated excess liquidity in the market, leading to inflationary pressure and depreciation of fiat currencies. Faced with this scenario, cryptocurrencies offer an alternative value that is not subject to the control of any central authority or the manipulation of the money supply.
Finally, another factor that explains the rise of cryptocurrencies is technological innovation and the development of new projects and platforms based on blockchain. These projects span various sectors and applications, such as decentralized finance (DeFi), non-fungible tokens (NFT), gaming, art, digital identity, among others. These projects generate greater demand and utility for cryptocurrencies, as well as greater competition and diversification of the crypto ecosystem.
In conclusion, cryptocurrencies are rising in 2024 due to a combination of factors including the expectation of greater adoption and integration, the perception that they are a safe haven from uncertainty and inflation, and technological innovation and the development of new blockchain-based projects and platforms. These factors could continue to drive the growth and consolidation of cryptocurrencies as a new asset class in the future.
Bibliographic references
(1) Why are cryptocurrency prices rising? https://www.ambito.com/finanzas/por-que-estan-subiendo-los-precios-las-criptomonedas-n5692893.
(2) Why is bitcoin rising again? - Cnn in Spanish. https://cnnespanol.cnn.com/2023/10/24/por-que-bitcoin-sube-nuevamente-trax/.
(3) Why are cryptocurrencies soaring in 2023? - Economy3. https://economia3.com/2023/04/19/565481-por-que-las-criptomonedas-se-estan-disparando-en-2023-repasamos-las-claves/.
