The cryptocurrency market has seen a significant recovery recently, and this is attributed to several main factors:
1. Political developments in the United States: Donald Trump’s victory in the US presidential election and his pledge to make the US a global hub for digital assets have increased confidence in the cryptocurrency market. The Republican Party’s control of both the Senate and the House of Representatives has also boosted expectations of passing legislation supporting the industry.
2. Increased institutional demand: The recent period has witnessed the launch of exchange-traded funds on the American stock exchange, such as those launched by major companies such as BlackRock and Fidelity, which attracted huge investments to the market. This investment flow reflects the growing appetite of major institutions for digital currencies.
3. Low supply and high demand: About 900 Bitcoins are produced daily through mining, while the demand from ETFs is about 2,800 Bitcoins daily. This imbalance between supply and demand has led to the price increase.
4. Expectations of easing regulatory restrictions: Expectations of more open policies towards digital assets by the new US administration have contributed to boosting confidence and increasing investments in the market.
5. General economic effects: Central banks’ interest rate cuts encourage investors to look for alternatives that provide them with higher returns, which pushes them towards taking greater risks, including investing in digital currencies.
These factors combined have contributed to the current recovery of the cryptocurrency market.
