1. Nikolaos Panigirtzoglou, a global market strategist from JPMorgan, recently spoke on the reasons why Bitcoin and other digital currencies have increased in value this year.
2. He believes that the banking crisis of recent months has helped push Bitcoin forward, as well as the launch of NFTs on the Bitcoin blockchain and the upcoming Bitcoin halving in April 2024.
3. He also said that when halvings happen, there is usually an increase in price due to a positive psychological effect caused by doubling production costs.
Nikolaos Panigirtzoglou on Why Bitcoin Is Jumping Up So Fast
Global market strategist Nikolaos Panigirtzoglou from JPMorgan recently gave his thoughts on why bitcoin and several other digital currencies are up so high since the beginning of the year.
Exposing Weaknesses of Traditional Financial System
Panigirtzoglou commented that while the banking crisis of recent months has certainly helped bitcoin move along, there are other contributing factors as well. He said: For crypto supporters, the U.S. banking crisis exposed the weaknesses of the traditional financial system given banks’ maturity mismatch is susceptible to bank runs.
Crypto supporters have been arguing for a long time that the crypto ecosystem is superior, not least because deposits are held in entities such as stable coins, which as a digital form of money market funds, are 100% backed with high quality liquid assets and are thus less susceptible to runs.
Launch of NFTs
He mentioned that another factor driving up prices is related to Non-Fungible Tokens (NFTs). He said that their launch on the bitcoin blockchain is a huge deal given how often NFTs are distributed via Ethereum chain.
„This is because metadata such as text [and] images can be inscribed on the bitcoin network itself without relying on smart contracts as seen with other blockchains, where NFTs are created through smart contracts,“ he added.
Lastly he believes that one more factor helping with bitcoins newfound bull run comes from its upcoming halving – which is slated to occur in April 2024.
„Many people are becoming mentally and psychologically prepared for this maneuver,“ he said adding: „Every time without fail bitcoin experiences heavy price surges when a halving takes place.“
„While this is some way away [from] ceteris paribus,“ he went on to say “this would mechanically double bitcoin’s production cost to around $40K creating a positive psychological effect.“
„This is because bitcoin’s production cost has historically acted as an effective lower bound.“
Price Increase Since Start Of 2023
Since beginning Of 2023 The Price Of Bitco Has Really Shot Up . P >