The first cryptocurrency rose to $51,500 for the first time in two weeks. The crypto market entered the traditional pre-New Year rally.
Investors’ appetite for riskier assets allowed bitcoin to break free from bears’ pressure and surpass the $51,000 mark again. Investors fear that the rapid ceasure of the US economic stimulus program and inflationary risks threaten their assets in 2022, and see bitcoin as one of the hedging instruments. Fears related to the spread of the Omicron coronavirus strain and the next tightening of restrictive measures in the United States and Europe add fuel to the cryptocurrency rally.
For cryptocurrencies, as well as for other risky assets, the last week of December traditionally becomes the “Santa Claus Rally”. This allows to hope for a strong end to the year, despite a certain depression of market participants in the past few weeks.
Growth was also shown by open interest in bitcoin futures. It peaked since December 3 at $18.8 billion.
Former CEO of Chinese mining equipment manufacturer Bitmain Jihan Wu expects the cryptocurrency market capitalization to rise to tens of trillions. Now the cryptocurrency market capitalization exceeds $2 trillion. “We believed that crypto and blockchain together would experience rapid growth in the future to tens of trillions of dollars,” Wu says. “And many of these new users will stay in the crypto market forever, so they’ll need advanced and sophisticated products to manage the wealth they accumulate in crypto assets.”