In today's digital currency market, Bitcoin has always been one of the most watched focuses. Recently, Bitcoin prices have shown signs of rising again, attracting widespread attention from the market and investors. What exactly is driving the continued rebound in Bitcoin prices? Let's take a deep dive and reveal the three key factors behind the surge in Bitcoin prices.

Surge in market demand

One of the primary reasons for the continued rebound in Bitcoin prices is the surge in market demand. As the digital currency market continues to grow and develop, more and more investors are beginning to turn their attention to Bitcoin, the leader. Recently, some large financial institutions have announced that they will increase their investment in Bitcoin, which undoubtedly provides strong support for Bitcoin prices. For example, MicroStrategy recently announced that it would purchase hundreds of millions of dollars in Bitcoin again, showing confidence in Bitcoin's long-term potential. In addition, with the popularity of digital currency trading platforms around the world, Bitcoin's liquidity has been greatly improved, attracting more attention and participation from investors.

Favorable macroeconomic environment

In addition to the increase in market demand, the favorable macroeconomic environment is also an important driving force for the continued rebound in Bitcoin prices. In recent years, central banks in many countries around the world have implemented loose monetary policies, resulting in increased volatility in traditional asset prices and increasing demand for safe-haven assets among investors. In this context, Bitcoin, as a decentralized and scarce digital gold, is favored by investors. Especially when the epidemic affects the global economy, Bitcoin is regarded as a safe-haven asset, and its price has been further boosted.

Driven by technological innovation

In addition to market demand and macroeconomic factors, technological innovation is also driving the continued rebound in Bitcoin prices. With the continuous maturity and development of blockchain technology, Bitcoin, as the first digital currency to apply blockchain technology, has gradually highlighted its technological advantages. The decentralization, high security, and transparent transactions of blockchain technology have laid a solid foundation for the long-term development of Bitcoin. In addition, with the upgrade and improvement of the Bitcoin network, the transaction speed has been significantly improved, and the transaction cost has been greatly reduced, attracting more attention and favor from investors and institutions.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

The price of Bitcoin has gradually rebounded since yesterday, approaching the $7,000 mark at one point, with the highest increase reaching 16%. There may be three main reasons for this market rebound:

Source: Pixabay

The Federal Reserve discusses fighting the epidemic through digital dollars

Democratic members of the House of Representatives have proposed two bills around the creation of digital dollars and digital wallets so that the Federal Reserve (Fed) can transfer digital cash directly to individuals and businesses. The move is aimed at supporting the economy during the COVID-19 pandemic, as the United States is second only to China and Italy in terms of the number of confirmed cases.

The two draft bills are called the "Responsibility for Workers and Families Act" and the "Financial Protection and Assistance to American Consumers, States, Businesses, and Vulnerable Populations Act." According to the authors of the legislation, the Federal Reserve will use digital dollars and digital wallets to transfer funds to "qualified individuals", $1,000 for minors and $2,000 for adults.

Both draft documents use the same definition for digital dollars:

“The term ‘digital dollar’ means a balance expressed in U.S. dollar value, which includes a digital ledger entry of a liability recorded in an account at any Federal Reserve bank; or an electronic unit of value that can be redeemed by an eligible financial institution (as determined by the Federal Reserve Board of Governors).

The law is likely to be supported by Congress, and the Fed will not mind, as it has previously admitted that it is considering issuing digital currency.

Update: According to the latest news, the latest version of the U.S. House of Representatives Democratic stimulus bill for the new coronavirus has eliminated the "digital dollar" proposal.

Fed announces unlimited QE, stocks, Bitcoin respond

Yesterday, the Federal Reserve surprised the market by announcing unlimited support for the economy. In addition to buying more U.S. Treasury bonds and mortgage-backed securities, the U.S. central bank will also buy corporate bonds and related exchange-traded funds (ETFs).

Johnny Fine, head of investment-grade bonds at Goldman Sachs, told CNBC:

This is an unprecedented move by the Federal Reserve.

Todd Rosenbluth, director of CFRA Research, an independent institutional equity research firm, said:

“Wow. The Fed will buy investment grade corporate bond ETFs like presumably $LQD $VCIT $SPIB. These funds are diversified and liquid, but demand for the underlying bonds has weakened.
It's a whole new world. ”

The Fed will buy corporate bonds under a program called the Secondary Market Corporate Credit Facility.

The Fed’s unlimited quantitative easing policy has stimulated the stock market, which has encouraged many institutional investors to look at other assets, including Bitcoin.

China is close to defeating COVID-19, and new treatments are being tested

China has reported zero local cases for several days in a row, despite an increase in the number of imported cases. Despite this, businesses in many parts of China are resuming production. However, many are worried that imported cases may trigger another wave.

Another sign of hope is the antimalarial drug known as hydroxychloroquine, which has recently been touted by US President Donald Trump. The drug, which has been around for more than 70 years, has been successfully used as an antiviral against COVID-19 in many hospitals in China, South Korea, and France.

However, many experts warn that the drug and its predecessor, chloroquine, have not yet been officially approved as COVID treatments. In addition, several people have been poisoned or even died from overdoses after taking chloroquine following Trump’s comments.

Although the drug is known to have potentially serious side effects, especially if the dosage is neglected, many trials have begun in Europe as it is one of the drugs that has shown impressive results against the new coronavirus.

In summary, the three main reasons for the continued rebound in Bitcoin prices are the surge in market demand, the favorable macroeconomic environment, and the promotion of technological innovation. With the continuous development and improvement of the digital currency market, it is believed that Bitcoin's position as a leader will be more stable, and prices will also usher in more growth opportunities. Investors should keep an eye on market trends, invest rationally, seize investment opportunities, and achieve the goal of wealth appreciation. The future of Bitcoin will be even more exciting!