Considering that the cryptocurrency sector is in its early stages, the lack of regulation and the scarcity of valuation methods, when looking at Bitcoin’s recent rise, we ask ourselves: Are BTC prices affected by the invisible hand of the market?
What Moves The Market Up?
As far as classical economics and technical analysis of the stock market are concerned, the price of an asset reflects its real and actual value. On the other hand, it is known that some commodities may be undervalued or overvalued. The gap between the real value and the quoted value is an ideal space for speculation.
Today, neo-institutional theories of economics have gained popularity because they better explain people’s behavior. These theories emphasize phenomena such as information asymmetry, opportunism in commercial exchange (dishonesty) or herd behaviour.
BTC once again showed its renewing strength by winning 23% in the last week alone. The $7,300 level is a strong resistance level in terms of technical stock market analysis, so the rate is likely to remain at its current level for some time to come. So, what has influenced BTC in the last few days?
Monday 16th July brought some news that may shed light on the recent rally:
First, BitPay announced that its acquisition of three suppliers (Keystone Capital, Venovate Marketplace and Digital Wealth) was approved by the US SEC and the Financial Industry Regulatory Authority.
Second, the New York Department of Financial Services said it has licensed virtual currency to a few cryptocurrency payment processors. Among them is BitPay, a live operator that has partnerships with companies such as PayPal, Microsoft and Warner Bros.
Third, the Financial Stability Board, an advisory body to the G20 countries, announced that it has developed a framework and identified indicators to monitor the financial stability implications of active crypto markets.
Finally, Lary Fink, CEO of Blackrock, revealed that the world’s largest asset manager has established a working group to investigate bitcoin, as well as other cryptocurrencies and blockchain technology.
Apparently, these events were enough fuel to raise the bitcoin rate of the valley where it landed in the second quarter.