Fear of inflation is driving the Bitcoin price up.

The price of Bitcoin – an asset believed to be a form of “digital gold” – rose as investors tried to hedge against inflationary risks.

According to CoinMarketCap data on the evening of November 10th (Vietnam time), Bitcoin price set a new record $ 68,789/ dong, break the high $ 68,500/ on the morning of September 11th. Increasing dynamics are driving up the market capitalization of coins $ 1.290 billion, near the landmark $ 1.3 trillion.

At 12 noon on 11/11 the Bitcoin price has adjusted to $ 64,500/ dong, 3.18% less than the previous day. The capitalization of the coin has also shrunk to $ 1.219 billion.

In addition to Bitcoin, ether – the second largest cryptocurrency in the world – has also reached a new high $ 4,853/ dong, then adjust $ 4,627/Copper.

Experts told us that the US inflation report drove cryptocurrency prices to record levels. Even if these coins correct, the long-term outlook remains.

Bitcoin price officially set a new record of USD 68,789 / coin on the evening of November 10th. Until noon on November 11th the price has adjusted down 6.23% from the high of more than 64,000 USD / VND. Photo: CoinMarketCap.

“Bitcoin appears to be bullish on US inflation news. It’s interesting because investors see Bitcoin as an inflation hedge, even if it doesn’t always work. That way, ”said Neil Wilson, Head of Analytics at Markets.com.Digital gold

According to the US Department of Labor on November 10, the US consumer price index rose 6.2% year over year in October, the highest increase since 1990.

Core CPI – excluding food and fuel prices – rose 4.6% year over year, its highest level since August 1991. Gasoline prices alone rose 12.3% last month, adding more than 50% to the total. The prices of cars and groceries also skyrocketed.

A sharp rise in inflation could cause the US Federal Reserve (FED) to tighten monetary policy faster than expected. The agency has indicated that it will be scaling back its bond purchase program over the next few weeks.

“Many people see Bitcoin as a form of ‘digital gold’. When the inflation rate is high, they buy bitcoin on a massive scale to counter the decline in the dollar’s purchasing power, ”said Wilson.

“Nominal rates have been volatile but not very strong. This means real rates are falling,” he added.

Other economies around the world also experienced high inflation rates. On November 10, China’s National Bureau of Statistics announced that China’s producer price index was up 13.5 percent year-on-year. The rise in producer prices exceeded a record in September, marking the highest level since China’s data collection in October 1996.

According to experts, China’s participation in the global supply chain will create a spillover effect and drive up global commodity prices even further.

“Wall Street is working hard to find some protection against inflation and continues to see traders entering the crypto market,” said Edward Moya, a financial expert at Oanda Consulting. ) answers us.

“New traders often look to Ether and Bitcoin. This will certainly continue next year, ”he added.

Strong volatility

According to the Oanda expert, the price dynamics of Bitcoin and Ether will slow down after the price hits $ 70,000/ dong and $ 5,000/Copper.

“Bitcoin price is up more than 136% this year. Ether is up 550%. Some hedge funds and money managers will try to take profits before the end of the year,” Moya said.

“Investor profit-taking could cause Bitcoin and Ether to lose some key price points, triggering a drop of around 5-10% before recovering,” said the forecaster.

In his opinion, the long-term outlook for Bitcoin and Ether remains very optimistic. “However, volatility is still high through the end of the year,” added Moya.

Mikkel Morch – CEO of the crypto hedge fund ARK36 – believes Bitcoin is reaching the milestone $ 70,000/ dong “seems imminent”.

Bitcoin price has continuously hit new highs over the past month. Photo: CoinMarketCap.

In addition, the price of Ether soared after the implementation of Altair – a network upgrade that went live in late October.Recently, JPMorgan – one of the leading banks in the US – reiterated its prediction that Bitcoin price will hit the milestone $ 146,000. Bitcoin price could reach, according to JPMorgan $ 73,000/ Dong this year. The bank also warned that the nature of cryptocurrencies is volatile.

Ethereum 2.0 will make Ether safer and more sustainable and scalable. According to CNBC, the new upgrade will not only help boost Ether, but the entire crypto world as a whole.

Thao Cao

ZING

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