Why is crypto going up

As we look at crypto price charts, it is evident to us that the market is driven rather by emotions than weighted reasonable decisions.

Why is trading predominantly based on emotional and intuitive swings? It has been a known scientific fact for long now; still, can anything be done with it? Can it be used to one’s advantage?

Simon Sinek points out that the limbic brain (exactly where emotions and imagination reside) is responsible for decision-making, although the more advanced—and younger—part of our brains, neocortex, is thought to be in charge.

Why is crypto going up? The fear of missing out coupled with anticipation of reward play perfectly together. Our general explanation fits pretty well: the human brain works that way. It also explains the insane volatility of some crypto assets.

Flashy ads and manipulations simply work. Reasoning and common sense don’t work that great.

Why is the crypto market going up: the ground-breaking news behind the rise

Crypto are on the way to official adoption. MasterCard released an announcement that they’ll do their best to add crypto support to their infrastructure sometime this summer. It’s good to know that digital assets are no longer tagged as outlaws.

On top of that, German and Ukrainian Central Banks voiced out an intention to design nation-wide digital assets based on Stellar Lumens technology.

Why is crypto going up today: Bitcoin style

The one and the only crypto that was a trailblazer for every other similar project is beating all the previous records this March. Bitcoin trades for about $50,000 now, and the price keeps rising. As you can see on the chart, it fell down a few times, of course, but some traders are still optimistic that it will hit up to $150,000 per BTC in summer. Isn’t it crazy?

Back in 2011, Michael Hendricks bought a pizza for 17BTC. Take a moment to digest it: considering the average BTC price today, that pizza would have been worth $850,000 while a decade ago it costed some $17. So why is crypto going up today? 

Because if bitcoin did it once, it (or possibly another revolutionary crypto) can probably do it again. This reason alone is enough to lure people into buying just a handful of satoshis in hopes it will make them rich in ten years, with zero effort.

It creates an avalanche: buyers rush in, and sellers rise the price in order not to miss out on their share. Big market players (international corporations, investors, government financial institutions) have no other choice but to step in. The latter, in turn, increases a given currency’s credibility, and so on.

Bitcoin’s become a legend. Its energy inefficiency has become legendary, too. Perhaps the mere realization of how much electricity the network consumes each second keeps pushing the price up.

Why is crypto going up after a single tweet

Now that you know how easily public sentiment is manipulated, imagine mass media and celebrities pouring oil on the flames.

Take one recent example: Tesla bought $1,5B worth of Bitcoin; then, approximately at the same time, Elon Musk put a #bitcoin hashtag in his Twitter bio. He must have laughed really hard, and it was the easiest money he ever made.

Crypto hardware providers, like Ledger Nano hardware wallet brand, would gladly inflate the price as well.

So don’t be surprised why is crypto going up today against all reason. Estimate the risks and use the situation to your advantage.

Why is crypto going up now: Ethereum style

Ethereum has chosen to be more than Bitcoin; it has more possible applications thanks to smart contracts and decentralized apps and, respectively, more development directions.

One of the ways in which it aims to be better is consensus algorithm. Ethereum currently uses proof‑of‑work (PoW) consensus, the same as Bitcoin’s, which is terribly inefficient. The plan, however, is to implement the proof‑of‑stake (PoS) one. It makes a sufficient argument for an environment-aware investor to prefer ETH over BTC.

The price of everything on Earth is bound to the balance of demand and supply to a certain degree. Another simple answer to, ‘Why is crypto going up now?’, is that there is a lot of demand and low supply at the same time. What does it have to do with Ethereum?

After the notorious EIP 1159 that is planned to go online in June 2021, transaction fees will burn instead of going to miners. Ether burning will decrease the total number of coins and possibly increase its market price (in other words, cut the supply). 

This update will not only save the coin from uncontrolled inflation, it will benefit the community by introducing a “base free”: a less volatile and lower in general version of transaction fee.

Ethereum devs are also going a little aggressive with the role of Ether in the whole ecosystem: it will become an obligatory transaction fee currency. Thus, we are forcing higher demand.

A similar upgrade could theoretically be applied to any blockchain-based currency. When you check the charts puzzled why crypto is going up today, it could be because yesterday its executives announced the radical ongoing supply/demand tweaks, plus some really useful technological upgrades that the community couldn’t resist.

Why is the crypto market going up: the summary

There is a lot of imaginary value in crypto but there must be a fair deal of real value as well. Why else would ETH gain about 750% in a year, compared to BTC’s 530?

Hope we’ve made the reasons clear concerning the answer to, ‘Why is crypto going up now?’.