Interest in bitcoin is compounded by the current uncertainty caused by the onset of the second wave of coronavirus, which is sending traditional capital markets at a loss. Investors are therefore focusing more on precious metals and alternative commodities.
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“Political instability in many parts of the world, such as Belarus or Nagorno-Karabakh, or the uncertain outcome of the US presidential election, is generally contributing to the resurgence of major cryptocurrency prices in addition to the continuation of the coronavirus pandemic and related measures,” said Martin Stránský, director of Bitstock.com’s largest domestic trader.
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After the summer, the increased interest in buying bitcoin was reflected in the increase in demand by traders by ten to 20 percent. People more often chose transactions over the Internet, but they also used bitcoinmats.
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“The price of gold for the three quarters of this year rose by a quarter to Monday’s 1921 USD per ounce. Bitcoin, known as digital gold, also grew, but with significant fluctuations. Covid-19 and the US presidential election bring with them uncertainty on the stock exchange, which will again play into the cards of safe ports, such as precious metals, ”added Golden Gate CZ analyst Marek Brávník.
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Bitcoin was at its lowest value this year in mid-April, when it fell to USD 3,900 (CZK 89,813) due to the coronavirus crisis. Subsequently, it began to grow and since the end of July has been constantly above the psychological threshold of 10,000 USD (230,290 crowns).
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Last week, representatives of the world’s seven major central banks said they were considering issuing their own digital currency. The representatives of the banks, with the assistance of the Bank for International Settlements, have already agreed on the principles of operation of such currency. Unlike private initiatives such as digital banks or online wallets, central banks would guarantee this currency. Central banks hope that in competition with alternative currencies, such as bitcoin, they will not lose control of the payment system and economic governance.
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Bitcoins and other virtual currencies
There are many virtual currencies. One of the oldest and currently the most popular are the so-called bitcoins. They were created in 2009, but have enjoyed greater popularity in recent years. This currency was designed so that it could not be influenced by any government or central bank.
Cyber coins are “minting” a network of computers with specialized software programmed to release new coins at a steady but declining pace. The number of coins in circulation is expected to reach 21 million in the end, which is to be around 2140.
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