The price of Bitcoin started rallying since Dec. 2019 from $6.4k to $10,550 earlier this week, based on data from TradingView. Such an upsurge represents more than 60 percent gains, meaning that Bitcoin performed better than several of other multi-billion-dollar assets except for ETH, XRP, and Tesla.
This powerful upsurge happened shortly following the expectation that Bitcoin would decline off a cliff. It happened suddenly such that short positions worth millions of dollars were liquidated over recent weeks.
Mike Novogratz, CEO of Galaxy Digital recently spoke to CNBC’s “Closing Bell” panel about the reasons for Bitcoin’s uptrend. The interview was published yesterday evening, and Novogratz said liquidity is the driver of the crypto’s shocking rally.
He mentioned the low interest rates established by central banks worldwide and people pumping in money, central banks’ efforts to inject capital into their markets via open market activities, thereby increasing demand for stocks and other assets (Bitcoin inclusive).
Novogratz shared his optimism concerning Bitcoin’s prospects for this year. He spoke with Bloomberg, giving three reasons why Bitcoin will continue to appreciate. The interview was published on January 30.
The first reason is the devaluation of fiat money. According to him, low interest rates worldwide have influenced abundant capital market liquidity and the devaluation of fiat money should assist Bitcoin and gold. That is, the inflation prompted by negligent central banks should prove the value of scarce assets, such as Bitcoin.
The second reason is Bitcoin becoming digital gold. According to Novogratz, the maturation of Bitcoin to a digital store of value investment may bring about an upsurge in prices. He also mentioned the performance of the asset in the midst of brief Iran-US war fears and the ongoing coronavirus outbreak, suggesting that its investment potential may attract investors with time.
The third reason is the increasing infrastructural levels within the cryptocurrency industry. He said it might enhance the asset.