Two of the world’s largest cryptocurrencies, Bitcoin and Ethereum, have hit new highs since May 2021. But given the volatility of cryptocurrencies in the past, what does this mean for investors? We try to get to the bottom of it.
What’s been happening with Bitcoin and Ethereum?
According to CoinDesk, the Bitcoin price was over $50,000 on September 4, up 20% from the previous month. On the other hand, Ethereum traded at more than $3,900 during the same period – a 40% increase.
These recent highs suggest that the two cryptocurrencies could be heading for an uptrend. The last time bitcoin hit an all-time high was in April at $63,000. By July, the price had dropped significantly to below $30,000.
Just like the past few months, these prices will either continue to rise or fall. But why are they so high right now? Let’s find out.
Reasons for Bitcoin and Ethereum’s soaring prices
Several developments have given digital tokens a boost.
El Salvador’s announcement to make bitcoin legal tender
El Salvador is about to become the first country in the world to adopt Bitcoin as one of its national currencies alongside the US dollar. The government announced that the cryptocurrency will be legal tender starting September 7, 2021. This news could spur Bitcoin acceptance in other countries and speculation, which could affect the price.
Facebook’s inclusion of NFT.
Facebook announced that it will be introducing its own digital currency, Diem.s wallet. In addition, company officials announced in late August that they could add NFT capabilities to their Novi digital wallet.
NFTs are based on the Ethereum blockchain and could therefore become more popular and increase demand for Ether due to Facebook’s strong influence.
US Securities and Exchange Commission (SEC) regulations.
The SEC is very keen to ensure that all players comply with crypto regulations. The commission has even brought charges against crypto executives who do not comply with the current laws.
What should investors know?
Crypto investments are very volatile. So, if you own Bitcoin and Ethereum, it is better to treat it as a long-term investment and wait. However, the upward trend is a positive move for most investors.