eToro CEO sees Corona crisis and politics as triggers for „crypto boom 2.0
The trading platform’s CEO is convinced that investors are responding to their governments‘ expansionary monetary policies with the crypto hype.
Yoni Assia, the CEO of Israeli social trading platform eToro, blames a mix of factors for the crypto market’s current surge. He sees the economic situation in Ethereum Code times of the Corona crisis as one of the main reasons.
„I think that a combination of several factors is responsible for the current records on the stock market and the crypto market,“ Assia tells Cointelegraph. To that effect, he adds, „We’re seeing unprecedented monetary and fiscal policies from governments around the world, giving us zero interest rates and even negative interest rates in some countries.“
However, the corona virus initially had a similarly devastating effect on Bitcoin (BTC) as it did on the rest of the economy, with the market-leading cryptocurrency crashing below US$4,000 in March 2020 as the crisis ran its course. Since then, however, it has been one of the big winners, as in subsequent months the Bitcoin price has climbed above 60,000 US dollars, which in turn has boosted its market capitalisation to more than 1 trillion US dollars. US dollars.
„Governments around the world are printing money like never before. Some are even taking the previously unimaginable route of spending aid money directly on the population,“ Assia continued. „This has created the biggest debate about the value of money ever. This debate has been passionately fuelled, especially in the crypto industry,“ as the eToro CEO explains, referring to Bitcoin’s built-in scarcity.
Indeed, Bitcoin’s circulating supply is capped at 21 million units of currency, though this cap is far from being reached. Approximately every 10 minutes, another unit of currency is „mined“ and put into circulation. The rate of increase becomes lower and lower over time. This is achieved by halving the „block reward“ paid for mining Bitcoin at regular intervals. Thus, the rate of increase from 50 BTC has now shrunk to 6.5 BTC. Through this mechanism, an increasing scarcity sets in until at some point no more coins can be created. In combination with increasing demand, the decreasing supply is supposed to ensure an „automatic“ increase in value.
The scarcity of Bitcoin and the accompanying increase in value is easy to understand, even for laypeople, as Assia says
At the same time, people would take note of the expansive monetary policy and the interest rate policy of their governments, and could put one and one together. But not only the crypto market would benefit from this, but also the stock market, because digitalisation would also make it easier than ever to enter stock trading.
Accordingly, the eToro boss concludes that „the current interest in the crypto market is as high as it was last in December 2017, when there was crypto boom 1.0“. The current situation could therefore easily be seen as „Crypto Boom 2.0“.