bitstarz casino

Why Bitcoin Is Going Up

As soon as Bitcoin prices start climbing precipitously, media outlets, blogs and social media users of all kinds start suggesting reasons why prices are climbing. This time is not different. From reports quoting a rise in futures contracts on the CBOE, to “whale watchers” claiming that a few big investors bought millions worth of Bitcoin, everyone has “the reason” why Bitcoin prices surpassed the $8,000 USD mark just a few weeks after charts showed prices were stuck around the $4,000 USD mark. The truth is, no one can really pinpoint the reason why Bitcoin prices rose to above $8,000 USD.

Theories Abound

We are not going to pretend that we know why either. Furthermore, we would like our readers to ask themselves another question. Instead of looking for a reason why Bitcoin prices rallied suddenly, shouldn’t you be asking yourselves why now? That is a much more interesting question, even if no one can pinpoint a reason for the timing of this rally either.

A number of outlets have reported that Bitcoin prices rallied now due to:

  • Big brand retailers enabling Bitcoin payments – Starbucks, Nordstrom and Whole Foods for example – although they are not rushing to admit that they enabled any kind of cryptocurrency payment.
  • The Consensus conference in New York – Bitcoin prices have gone up during this conference before, but there is no causal relationship.
  • US-China trade war – which would make sense if a critical mass of people understood Bitcoin’s value as a hedge against the traditional economy, but there is no evidence of that being the case yet.

Bitcoin Prices Remain Volatile

None of these events can actually point to why Bitcoin prices are going up and why they are going up now. They do point to a critical factor that boosts Bitcoin price rallies: hype. This hype translates into volatility and puts Bitcoin prices in bubble territory, because people end up buying the hype instead of understanding the value behind Bitcoin.

The Feedback Loop

Hype dynamics in this space are interesting. If you take a look at Google Trends data for search queries, you will notice that the “why is Bitcoin going up” search term, suddenly exploded in the last 2 weeks. That lagged the beginning of the Bitcoin price rally by about 2 days – although a general upward trend was already visible weeks before that, at least in hindsight.

 

Advertisement
Why Bitcoin Is Going Up Google Trends

Google Trends shows a sudden spike in queries about why Bitcoin is going up.

 

Media outlets work to provide the posts necessary to satisfy the need for the information that people are looking for. Some of those posts are better than others, but all of them – either by design or by chance – serve the same purpose: to feed the hype. That in turn encourages more people to put money into cryptocurrency markets, which makes the prices go even higher.

No Matter How Much Bitcoin Goes Up By, Whales Rule in the Crypto Jungle

Just remember that prices already rallied before you buy into the hype. Also keep in mind that the price of a small market cap asset that is not regulated can be easily manipulated – and that doesn’t mean we are advocating for regulation! Whales can still put hundreds if not thousands of coins back in the market with ease, overwhelm demand, get prices to crash and then scoop their coins back at a lower price. Therefore, instead of looking up “why Bitcoin is going up” on Google, ask yourself why now and then analyze whether you believe in the asset’s value proposition or not. Then you can determine if you want to buy in or not. Many people will not follow this crucial piece of advice and will buy high to then sell low, trying to make a quick buck.

Bitcoin Chaser

Here at BitcoinChaser we live and breathe Bitcoin.

More Posts

Pin It on Pinterest