5 reasons that helped the growing of cryptocurrency market

It is no secret to many that in the recent period we have witnessed a great focus on

what is happening in the cryptocurrency market, as currencies such as Bitcoin, Ethereum and Dogecoin have witnessed a great turnout from a wide range of investors and everyone looking for wealth. Bitcoin reached its highest level with more than $ 60,000, while it was hovering at less than $ 10,000 just a year ago.

This heavy demand for trading in these currencies posed a very important question, which is: What are the reasons for this sudden boom? Will it be on this upward path, or is it just another short-term bubble that is about to burst?

1- The cryptocurrencies showed no signs of disappearance :

Bitcoin and other currencies have proven their resilience, as many testify that these currencies have shown signs that they will remain forever, and with Bitcoin in particular, its value declined sharply in November of 2019, which made some observers mention that this collapse It will mark the beginning of the end for Bitcoin and other currencies.

But, contrary to the expectations of the pessimists, Bitcoin continued to witness significant growth during the past year and the current year, and there were no signs of weakness as a currency in the market, which made the perception towards it change dramatically and many people have a renewed perspective on the currency, as they see that it has become more legitimate and able to bear Hardships.

2- Full support from major companies:

The public confidence that many companies and various major institutions provide for Bitcoin and other cryptocurrencies showed a significant escalation in their emergence and the beginning of the belief that it is the new way to buy and sell, for example: Coinbase, which is one of the most famous companies that allows users to buy cryptocurrencies, introduced It sold its initial public offering (IPO) and went

public for the first time.

As the value of the company after its appearance on the Nasdaq exchange reached about $ 86 billion with recording tremendous growth in revenues, as this step constituted a major leap for the future of these currencies, which led to investor optimism about the futures contracts of both the company itself and the cryptocurrencies traded on its platform, in addition to In addition, many other large companies have taken serious steps that demonstrate the true power of cryptocurrencies.

Where some companies such as: Visa and PayPal have allowed the use of cryptocurrencies as a means of payment when purchasing products and services over the Internet, and Nvidia announced a new processor designed to mine cryptocurrencies, the emergence of ATMs for cryptocurrencies, in addition to the public support of celebrities. For these coins, their fans buy more of them.

According to many studies, some people invest heavily in the cryptocurrency market because they have long-term economic concerns, especially with most countries suffering from many economic hardships due to wars, the Corona pandemic and other reasons.

3- The emergence of competing cryptocurrencies:

Although the focus may often be when talking about cryptocurrencies on Bitcoin because it is the most visible and prominent among all other currencies, we also need to acknowledge the supportive role of other cryptocurrencies, such as: Ethereum, Litecoin and Dogecoin, As many users have taken notice of these cryptocurrencies strongly and are becoming more competitive.

For example: When more people buy a currency like Bitcoin and make a lot of profits when trading, there is a multiplier effect for other cryptocurrencies as people try to try their luck to get rich by trading in other cryptocurrencies competing for the Bitcoin currency.

4- Inflation and economic hardship:

As this led to the emergence of high inflation rates and a decrease in the purchasing power of the US dollar, and then most of these people tend to invest in these digital currencies in the hope that their value will increase compared to well-known currencies, especially the US dollar, which leads to quick and large profits.

5- The spread of the Corona pandemic and its impact on our use of technology:

The emergence of the Corona pandemic (Covid-19) and its continued spread so far has had a great impact on how we see and use technology on a daily basis, for several months people have been virtually stuck in their homes, working remotely, and have been paying digitally for everything.

 

Hence, this forced situation made most people realize how decentralized we have become and how we have become completely dependent on digital technology, and in a world where people work remotely and pay digitally and have complete confidence in online services, cryptocurrencies will be king without a doubt.