BTC: Explosive Price Growth Incoming

The cryptocurrency market keeps recovering. Bitcoin has advanced by 7.7% since the beginning of the week and is now trading above the $7200 mark. Buyers have finally managed to break through critical resistance and a major psychological barrier at $7,000. All the main altcoins remain in the green zone. The total capitalization of all digital assets in circulation reached $ 200 billion, which is the highest level since mid-March. The bullish momentum in the cryptocurrency market is closely correlated with improving market sentiment in traditional financial markets. However, judging by the recent BTC/USD results, it becomes obvious that investment in the crypto industry offers more earning potential than trading stocks and regular currency.

The global economy has taken a huge hit in the aftermath of the COVID-19 pandemic. The World Trade Organization predicts that the global economic slowdown caused by the coronavirus will surpass the 2008 crisis. The pandemic and border closures across the world caused a decrease in trade and passenger traffic, as well as weakened business activity in most countries. As a result, the world’s GDP drop is projected to exceed 5%. It is worth noting that a drop in economic activity and rapid growth of unemployment will inevitably be followed by a sharp increase in inflation since trillions of dollars invested in the economy will create strong inflationary expectations and trigger the sharp rise in prices. As soon as the pandemic eases, the magnitude of the unprecedented money emission carried out by world central banks will become apparent to everyone. Let’s recall that only the US government injected more than $ 2.2 trillion into the economy, leaving the door open for future increase in emergency financial assistance the situation around pandemic doesn’t show signs of improvement.

The global stock market has already lost $ 20 trillion over the past month. If we correlate this amount with a total money supply of $80 trillion, we can easily calculate that US dollar inflation amounted to about 25%. But since the global financial system is designed so that the dollar printing press is located in only one country in the world, inflation will smoothly spread across the entire global economy in one or two months, taking into account the time lag. With this in mind, market participants will start paying more attention to those financial assets that are not exposed to inflationary risks. Bitcoin is one of the best candidates for this role. Its inflation-free nature will serve as good protection against the devaluation of fiat currencies.

The upcoming halving provides additional fundamental support for Bitcoin. There are 35 days left until the event. It’s worth noting that the cut in BTC supply, which occurs once every four years, is often considered as a highly positive event for the most popular cryptocurrency. Thus, optimistic sentiment towards Bitcoin will be bolstered not only amid the inevitable depreciation of classic fiat money but also due to the natural reduction in its supply, because it will already become more expensive to mine it in May. Given the above, the BTC/USD observed over the past few days can only be the beginning of a powerful bullish rally with the closest target at $10,000.