What are the reasons why cryptocurrencies are rising?

Despite the wave of losses in the cryptocurrency market since April, it managed to make record gains by the end of last week, driven by several developments.

These gains come as the cryptocurrency market continues to face broad tightening campaigns that threaten its course, with the positions of certain countries, including China and European countries, as well as those announced by many large investors, which mainly affect the future of those currencies, which in the past months have experienced sustained bleeding and numerous shocks.

Recent weekly gains in cryptocurrencies have increased their market value (combined) by more than 27 percent, with profits of more than $328 billion, according to CoinMarket Cap data.

The same data reveal that the value of digital currencies on the market had risen to more than $1,533 billion as of Last Friday, up from about $1,204 billion the week before.

Analysts attribute the recent rise in cryptocurrencies to Tesla Chairman Elon Musk's remarks about the company's openness to accepting bitcoin for payment. There is also speculation that Amazon may enter the sector, although the e-commerce giant has denied its tendency to receive payments using Bitcoin as recently raised.

No reference

But Cairo investment finance professor Dr. Mustafa Badra, in special remarks to Sky News Arabia, said that "the rises in the digital currency market are not carried out according to certain mechanisms or clear data, and the investor who wants to legalize his investment situation cannot find justifications for the decline, rise and risk ratio."

 

Badra gives an example of bitcoin, which he said was in the range of $28,000 more than a week ago, and rose by the end of last week to about $38,000, explaining that "there is no real and clear reference through which the investor can measure the performance of these different currencies, unlike the traditional currency market or any other market related to the economic situation."

Bitcoin made a record gain of more than 30 percent in the last week, after its price last Friday reached more than $38,000, up from $29,000, to a market value of $729 billion.

As of Friday, ethereum had posted weekly gains of more than 31 percent, reaching $2,343. The Pennance Coin gained about 17.5 percent to $310. Cardano posted gains of about 19 percent, reaching $1.26.

X-Ripple also posted a gain of nearly 37 percent, reaching $0.72. USD Coin followed, up nearly 1.9 percent, to $1. Doug Quinn won 17 percent, recording $0.20.

"The official currency market benchmarks are linked to several factors, including the economic performance of the currency country," the economist said. As well as the oil market references, the price of which is determined by the OPEC system and the volume of supply and demand, whether increased or decreased. "But the situation is different in the cryptocurrency market, where speculation is worsening and fans of its rises and promotion are usually the same speculators."

Unregulated operations

"The high risk rate in these currencies also comes from the possibility of direct human intervention, whether by internationally regulated transfers, activities and processes, which explains their declines and then their sudden rises," Badra said in an interview with Sky News Arabia.

 

Badra at the same time talks about the impact of official positions on cryptocurrencies, including the Chinese position, in light of Beijing's earlier notification to financial institutions and payment companies to ban the provision of cryptocurrency services to customers, explaining that such positions would clamp down on cryptocurrencies and affect their status and future.

He also spoke of what Turkey had experienced in the face of cryptocurrencies, such as the escape of the founder of a company accused of fraud, exacerbating the crisis facing those currencies, as well as its position in a country such as Malaysia (which had recently destroyed hundreds of Bitcoin mining devices), as well as in Britain (of which police had recently confiscated £180 million).  Badra said all these campaigns are tightening the blockade on digital currencies and drawing attention to the risk they entail, affecting their future in general.