Cryptocurrency prices have gone through a temporary low last week, but they are picking up speed now. Bitcoin has broken through the $ 10,000 mark again and now stands well above $ 11,000. The market capitalization has risen by about 40 billion within the last week and Bitcoin dominates it with about 70 percent. This is the highest level since July 2017. This shows the current strong focus on Bitcoin, which underperforms the Altcoins in comparison.
For the first time in ten years, the US Federal Reserve cut interest rates by 0.25%. Many had previously argued that a Fed rate cut for Bitcoin would be net positive. Lower interest rates tend to increase liquidity on the financial markets, which could have led to a stronger inflow into Bitcoin.
On August 1, US President Donald Trump announced further tariffs on Chinese goods via Twitter and further fueled the trade dispute. Overall, goods worth 300 billion will be affected by another 10 percent tax. Bitcoin then saw strong gains alongside other safe-haven assets (investments that are expected to retain value in times of market turmoil).
Binance Research also concludes that Trump’s tweets and the trade war are a catalyst for Bitcoin’s price hike:
Furthermore, the increase could be related to a series of positive comments last week. Mike Crapo, Chairman of U.S. Senate Banking Committee, even said that the US could not ban Bitcoin. Some positive Bitcoin news is also coming from China, although the country bans crypto trading and ICOs. The Bank of China has recently published a predominantly positive infographic to create Bitcoin Awareness. This could indicate that skepticism in China is weakening against cryptocurrencies.