Prices for Bitcoin and Ethereum have soared in recent weeks after token values plunged in January.
The cryptocurrency market is back on the rise this year following a few rough months.
Crypto prices plunged in mid-January, and Bitcoin dropped below $40,000 for the first time since last fall. But no fear, there’s been an uptick in the market with the help of rising prices for Bitcoin, Ethereum, and Cardano. As a result, the total market value of cryptocurrencies rose above $2 trillion last Friday, March 25.
The volatility of the cryptocurrency market causes its value to fluctuate often. The last time the market was valued this high was in November, when Bitcoin’s price reached $69,000 — pushing the market cap briefly to $3 trillion.
Here are the prices for what some cryptocurrencies are trading for as of around 2 p.m. Wednesday:
- Bitcoin is sitting at $47,645 per coin
- Dogecoin is $0.14
- Ethereum is up 18% to $3,395.45
- Cardano is up a whopping 51% to $1.20
Why is the crypto market up right now?
There could be many reasons for the positive flip in the market, so let’s break down a few possibilities.
On March 9, President Joe Biden signed an executive order to allow federal agencies to design their own strategies for policies and regulations on digital assets like crypto. One thing people don’t want to hear in the decentralized world is the word regulation, so crypto prices quickly dropped for a few days.
A week after the crypto regulation announcement came from the White House, the Federal Reserve announced that it would be raising interest rates for the first time since 2018. This prompted investors to put more money into digital assets.
Aside from governmental moves, blockchain leaders and financial institutions are stepping their game up in the crypto arena.
Terra is a programmable blockchain e-commerce platform powered by algorithmic stablecoins. Its native tokens are Luna and TerraUSD (UST). The crypto’s founder, Do Kwon, tweeted that he’s building a $10 billion Bitcoin reserve to help boost UST’s value:
There are also speculations circling that Terra just purchased $139 million worth of Bitcoin today to make good on that promise, and Kwon has been buying up Bitcoin since Monday, which raises the token’s value.
One theory is that Bitcoin prices soared after the Russian government said it would explore selling oil and gas in cryptocurrency to avoid further sanctions. The value of Russia’s currency has fallen 20% due to its invasion of Ukraine.
Goldman Sachs recently reached a new milestone when it became the first major U.S. bank to trade crypto over the counter in a transaction with crypto merchant bank Galaxy Digital. This shows that Goldman is serious about developing its digital assets capabilities and might attract more customers who trust traditional banks to handle their crypto business.
“This trade represents the first step that banks have taken to offer direct, customizable exposures to the crypto market on behalf of their clients,” Galaxy Digital co-President Damien Vanderwilt told CNBC in an interview.
What could this mean?
Bitcoin’s price surpassed $45,000 on Sunday for the first time since March 2, which means it has been sitting below average for nearly two months. Some experts predict that the token’s price will hit $50,000 soon, but we don’t know for sure. The last time Bitcoin hit $50,000 was on Christmas Day.
The phrase “bullish trends” has been circulating a lot in this conversation about why the crypto market is up. If you’re not a finance guru or into stocks, this term may go over your head. Simply put, bullish in commerce means a rise in prices and could signal that a particular investment is potentially profitable. Even in an unpredictable market, experts are eager to predict that this rise in cryptocurrency prices will continue to trickle upwards.
I wonder what this change in the market means for the athletes who took some of their salaries in crypto. As part of a partnership with CashApp announced in November 2021, star NFL wide receiver Odell Beckham Jr. agreed to take his 2021-2022 salary in Bitcoin. Reigning back-to-back NFL MVP Aaron Rodgers took a portion of his salary in Bitcoin, too. Did they move their digital assets around when the market took a plunge in January? Are they making more money now because they decided to play the long game with their crypto investments? We’ll try to find out soon.
Still, before you get into the crypto investing game, do your research.