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March 4, according to a report from the Spanish website "National Report" on February 24, the price of the most popular cryptocurrency doubled. After the darkness, there is hope. Bitcoin started the year with unparalleled news. In January of this year, the U.S. Securities and Exchange Commission (SEC) for the first time approved the Bitcoin exchange-traded fund (ETF), a long-awaited moment for cryptocurrency enthusiasts. They are most likely to put some of their savings into the market, just like joining the Wall Street club. This means that millions of investors in the country can now buy Bitcoin with just a click of the mouse, without the need to store Bitcoin in a "wallet."
Looking at the basic trend for over a year, the price of Bitcoin has been on the rise, turning the so-called cryptocurrency winter into a nightmare of the past. Francisco Maroto, Director of Digital Assets and Blockchain at the Spanish Foreign Bank, said: "The approval of the ETF represents the institutionalization of Bitcoin as an asset and also indicates that the traditional financial industry's acceptance of cryptocurrency is increasing."
However, Bitcoin has been criticized by many Nobel laureates in economics: Paul Krugman believes it is no different from a Ponzi scheme; Joseph Stiglitz believes it is a tool for money laundering and tax evasion; Robert J. Shiller believes it is a speculative bubble born of excessive enthusiasm. Moreover, although Bitcoin can be considered an investment asset, its use as a currency in daily life has stagnated. Spanish economist Álvaro D. María commented: "Bitcoin is not a substitute for legal tender (cash), and you don't need to look for its usefulness there. Bitcoin increases the transaction costs of payments and is inherently unstable."
The book "Cryptocurrency in the New Financial Landscape: Interest Rates, Prices, and Adoption," written by Santiago Calvo, Pedro J. Cuadros-Solas, and Francisco Rodríguez, mentions the correlation between expectations of interest rate cuts and the increasing price of Bitcoin.
The book points out that the economic cycle is becoming increasingly linked to the trend of cryptocurrencies. As a reaction to the general rise in prices, the evolution of inflation, especially changes in interest rates, seems to have a corresponding impact. The higher the rise in interest rates (or the expectation that interest rates will not fall), the lower the value of cryptocurrencies. In conclusion, the rise in interest rates will reduce the attractiveness of cryptocurrencies to investors, as investors can obtain higher returns from government bonds, corporate bonds, or deposits. |
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Post time 15-3-2024 21:48:46
