Bitcoin Shows Its Strength Despite Rising Oil Prices
Marcus Sotiriou, analyst to UK based digital asset broker Global block
Bitcoin (CRYPTO:BTC) continued higher yesterday and is holding above $43,000 despite fears over rising oil prices. WTI crude rose more than 5% as Putin said he wanted to be paid in rubles for Russian gas. As the EU gets around 40% of its gas from Russia, this has huge implications. Although Bitcoin remains strong in the short term, rising oil prices increase the likelihood of a recession in the coming year. Oil is up around 25% in the past 6 days alone, and Bitcoin bulls will want to see that tail end to continue strengthening.
Despite the uncertain macro environment, crypto developers continue to innovate and whales continue to accumulate Bitcoin. Luna (CRYPTO: LUNA) Founder Do Kwon has revealed plans to buy $3 billion worth of Bitcoin in the near term for Luna’s reserves, with a longer-term goal of $10 billion. He said, “We have $3 billion in funds ready to seed this reserve, but the technical infrastructure (bridges, etc.) is still not ready yet.” He plans to buy Bitcoin in $125 million increments, with the first payment made yesterday. Tens of thousands of Bitcoins bought and withdrawn from the market will likely have a significant impact on the price over the coming weeks/months. Bitcoin bears will struggle to fight off the buying pressure and in my view sellers will be exhausted leading to an upward move above $45,000, assuming oil prices do not rise. not reach new heights.
With Germany at high risk of falling into recession, with GDP shrinking by 0.7% in the last quarter, a report from Kucoin shows that 44% of Germans are considering investing in crypto. KuCoin CEO Johnny Lyu said, “Cryptocurrencies are very popular among accumulation strategy proponents, especially among the younger generation. use of cryptocurrencies.” After Germany reached a milestone last year by approving special funds (amounting to over $200 billion in assets under management) to invest in digital assets, Germany provided an environment investment friendly.