During the last few days the market cryptocurrencies has been on the rise after various events took place.
Bitcoin, The pioneer cryptocurrency and main reference of the digital market, has experienced a notable increase in its value since the recent electoral victory of Donald Trump.
What is Bitcoin?
Bitcoin is a decentralized digital currency created in 2009 by an anonymous developer under the pseudonym Satoshi Nakamoto. Unlike traditional currencies, it is not backed by governments or central banks. Instead, it operates through a peer-to-peer network that uses blockchain technology, a digital ledger that secures and verifies all transactions in a transparent and immutable manner.
The operation of Bitcoin is based on three main pillars: the blockchain, the nodes and mining. The blockchain is a public ledger where all transactions made with Bitcoin are recorded. Each block contains a set of verified transactions, and once added to the chain, it cannot be modified.
Nodes are computers connected to the Bitcoin network that store a complete copy of the blockchain, guaranteeing its decentralization. This means there is no single point of control or authority, reducing the risk of manipulation.
Lastly, mining is the process by which transactions are validated and new bitcoins are created. Miners solve complex mathematical problems to add blocks to the chain, being rewarded with bitcoins.
Victor Charles, CFO of Open Bitcoin Protocol, stated “Trump during his presidential campaign promised to create a positive regulatory environment for cryptocurrencies. Likewise, many of the elected congressmen have a favorable view of them, which means that the new administration and the new congress will be the most pro-crypto in US history. “That is why the recent rise in BTC prices since Election Day is not surprising.”
Claudio Cossio, Co Founder of Meta Pool stated “We are seeing an appreciation of Bitcoin due to several important factors, interest has been aroused by institutions, such as the purchase of Microstrategy for $2 billion USD, as well as Financial Institutions are for offering futures and the one that has had the most impact is the new administration in the USA is putting pro-crypto people in important positions”
What factors influence the rise in the price of BTC?
The recent rise in the price of Bitcoin and other cryptocurrencies has been directly related to investors’ perception of Trump’s victory. His victory has generated a rise in traditional markets due to the great expectations that exist after his mandate.
This phenomenon is not new: disruptive political movements often increase demand for assets that function as a refuge from financial instability.
One of the key factors behind this rise is the perception of Bitcoin as “digital gold.” Like gold, Bitcoin is finite (only 21 million coins will exist) and is considered a store of value in times of crisis. Additionally, investors are seeking to protect themselves against potential inflation, especially if future economic policies result in increased issuance of fiat currency.
Another element that has influenced is the growing institutional adoption of Bitcoin. In recent years, large financial companies have shown interest in cryptocurrencies, seeing them not only as a speculative asset, but also as a portfolio diversification tool. Trump’s victory has accelerated this interest, especially among those seeking to reduce their exposure to traditional currencies subject to political volatility.
María Fernanda Juppet, CEO of Cryptomkt explained that the recent rise in the value of Bitcoin and other cryptocurrencies reflects a growing interest and confidence in digital assets as financial and investment tools globally. At CryptoMKT, we observe this trend as a sign of the strengthening of the crypto ecosystem and an opportunity to continue democratizing access to these assets in Latin America.
Luis Eduardo Berrospi, General Manager of Fluyez, explained that after the slowdown in the price of Bitcoin in the previous quarter, the recent results of the elections in the US have positively affected the market, observing a growth of up to 25% in the last week.
Lastly, the positive market sentiment has also been amplified by retail investors. The social and media narrative about Bitcoin as a hedge against political uncertainty has attracted new participants to the ecosystem, further driving demand.
In conclusion, the rise in the price of cryptocurrencies following Trump’s victory is another example of how global political events can have a significant impact on financial markets. Bitcoin, with its decentralized nature and ability to act as a safe haven, continues to establish itself as a viable option for both large investors and the general public in times of uncertainty.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
