Sign In
Learn bits
Science & Tech.
Mahesh

09/03/24 08:16 AM IST

What factors are pushing Bitcoin to a new all-time high?

In News
  • Recently,Bitcoin, the largest cryptocurrency by market capitalisation, broke its previous price record to hit a new all-time high of $69,170.63, according to the CoinMarketCap live tracker.
Factors behind Price rise
  • The market is recovering from the shock of Russia’s invasion of Ukraine that started in 2022, as well as the collapse of cryptocurrencies LUNA/UST and the subsequent fall of trading platforms such as FTX that same year.
  • In addition to a market recovery, the U.S. Securities and Exchange Commission (SEC), known for taking strong legal action against crypto companies, approved the first spot exchange traded funds (ETFs) for Bitcoin.
  • This move told cautious investors as well as financial institutions that the regulatory landscape was perhaps beginning to open up, and it encouraged more traditional investors to explore the world of blockchain-based assets.
  • Bitcoin investors and traders are preparing for the Bitcoin Halving event predicted for this April.
  • Many investors and analysts believe this engineered scarcity mechanism will help drive up the price of the cryptocurrency.
Bitcoin Halving
  • The Bitcoin Halving takes place about every four years and sees the crypto mining reward cut in half. While this may sound like a loss rather than a cause for price rises, there is more to the process.
  • Bitcoin miners use advanced computer equipment and enter an energy-intensive race in order to digitally “mine” their coins.
  • This means they get some Bitcoin as a reward for helping the blockchain grow by processing other users’ transactions.
  • While the mining reward is currently 6.25 BTC, this will be halved around April so that fewer coins are introduced into the crypto economy.
  • Bitcoin has a maximum supply of 21 million BTC, and more than 19 million coins are already in circulation.
  • The halving tightens this process so that the coins will continue to be released at slower and slower rates, likely extending into the next century as well.
  • The Bitcoin Halving is meant to automatically keep the asset scarce, based on mathematic principles. This is unlike paper money, which can be printed on the basis of human decisions.
Largest cryptocurrency
  • Bitcoin’s market cap is more than $1 trillion this week, making it the leading crypto.
  • Second in line is Ethereum, with a currency called Ether (or ETH for short). However, Ethereum’s market cap was less than $500 billion this week.
  • Ethereum has a relatively more corporate structure, though developers worldwide are free to participate in its ecosystem that is known for enabling self-executing commands called smart contracts.
  • People can also establish their own crypto tokens using Ethereum’s underlying infrastructure, or build other blockchain services.
  • Ether used to be digitally mined like Bitcoin, but the platform has switched to the less energy-hungry ‘proof-of-stake’ model as it continues to grow.
  • Ether prices tend to echo those of Bitcoin, so ETH also enjoyed a lift this week as Bitcoin hit its all-time high. Ether crossed the $3,900 threshold, but it is yet to beat its all-time high price of $4,891.70 from November 16, 2021, as per CoinMarketCap.
Source- The Hindu

More Related Current Affairs View All

15 Nov

Government issues guidelines to curb misleading ads by coaching centres

'The central Government issued new guidelines aimed at curbing misleading advertisements by coaching institutes, specifically prohibiting false promises such as "100 per cent selec

Read More

15 Nov

Janjatiya Gaurav Divas

'Every year on November 15th, Janjatiya Gaurav Divas is celebrated to honor the contributions of these communities, especially in India’s freedom struggle.' 5th November

Read More

15 Nov

Supreme Court’s order on mandatory accessibility standards

'A bench of the Supreme Court last week ordered the Union government to frame mandatory rules for ensuring the accessibility of public places and services to persons with disabilit

Read More

India’s First Ai-Driven Magazine Generator

Generate Your Custom Current Affairs Magazine using our AI in just 3 steps