On Friday morning, Bitcoin surpassed $118,000 just one day after reaching an all-time high above $112,000. This significant event had far-reaching consequences for the market.
Liquidations of Short Positions on Bitcoin
Bitcoin is experiencing a remarkable surge, rising from $110,000 to $118,000 in less than 24 hours. This led to a liquidation of short positions not seen in years. About 237,000 traders had their stop-loss orders triggered, resulting in losses totaling over half a billion dollars.
Impact of Jerome Powell on the Market
The rise in Bitcoin may be linked to an intensifying campaign against Federal Reserve Chairman Jerome Powell. Donald Trump referred to him as 'Mr. Too Late' due to his refusal to lower interest rates despite falling inflation. The pressure increased after the U.S. President sent him a handwritten letter urging him to act on rates. Alan Blinder, former Fed vice-chairman, remarked, 'I don’t believe he will, and I don’t believe he should.'
Potential Bitcoin Buyers
Some experts believe that the recent rally is linked to major companies showing interest in Bitcoin. Rumors have circulated that Amazon is considering making Bitcoin a treasury asset. This interest may have gained momentum after Jeff Bezos sold $665 million worth of assets. Elon Musk has also made statements suggesting he may soon purchase Bitcoin.
The surge of Bitcoin to a new record highlights not only market factors but also the interplay with political scenarios in the U.S. and actions of major investors. This event underscores the volatility of the cryptocurrency market and interest in Bitcoin as a hedge against inflation.
