By
Steve Muchoki
April 18th, 2024
The price of the leading digital currency keeps growing in value, positively influencing the entire cryptocurrency market.
Bitcoin continued to move higher on Monday, after surpassing the $11,000 mark over the weekend for the first time since January. The cryptocurrency reached its highest level since last month at over $11,200 on Sunday, before falling to $10,350 by the end of the day. However, it rebounded on Monday to $11,050, showing a 5% gain.
Thus, bitcoin has managed to recover from its two-month low of $6,000 recorded earlier this month and is currently trading at $11,186, according to CoinMarketCap. Other major digital currencies have escalated as well. The world’s second cryptocurrency, Ethereum, is getting closer to the $1,000 level and is now standing at $940, as CoinMarketCap shows. The third cryptocurrency, Ripple, is trading at $1,14.
The surge had a positive impact on the overall cryptocurrency market, which recorded a valuation of $502 billion on Monday. The last time it broke the $500 billion mark was in mid-December. At the time of writing, the total market cap is worth more than $501 billion.
Cryptocurrency prices declined at the start of 2018, which according to analysts was due to bans on virtual currencies imposed by different countries. Several major banks, including JP Morgan Chase, Citigroup, and Bank of America, prohibited the use of credit cards for purchasing digital currencies, while South Korea recently banned unknown cryptocurrency trading accounts. Meantime, the US authorities have begun an investigation of the Bitfinex exchange over its links to Tether, which is rumored to being used to artificially inflate bitcoin prices.
Still, the regulators in South Korea, which is the key market for cryptocurrencies, confirmed last week that they will allow digital currencies to operate in the country, what has been positive news for traders who feared a complete ban. According to HanKyoReh, one of South Korea’s largest media outlets, the demand for the cryptocurrency is surging now, for the first time since the middle of January.
Besides, analysts predict that bitcoin will continue its upward momentum. Tom Lee, the Wall Street strategist covering bitcoin, said bitcoin will reach $25,000 this year, while Saxo Bank’s analyst Kay Van-Petersen believes the digital currency will cost $100,000.
According to a new report by S&P Global Ratings, institutional investors should not fear a collapse of the cryptocurrency market, as it is unlikely to disrupt financial markets. Investors, researchers say, would be better protected in case of a huge drop, while retail investors would feel the impact of the collapse the most.
“We expect rated banks to be largely insulated, given that their direct or indirect exposure to cryptocurrencies appears to remain limited,” said Mohamed Damak, financial institutions sector lead at S&P Global Ratings. “For now, a meaningful drop in cryptocurrencies’ market value would be just a ripple across the financial services industry, still too small to disturb stability or affect the creditworthiness of banks we rate.”
“We believe that the future success of cryptocurrencies will largely depend on the coordinated approach of global regulators and policymakers to regulate and enhance market participants’ confidence in these instruments,” Damak added.