Bitcoin price strengthens as European equities forge comeback
European stocks seem to have recovered immensely, with the sector showcasing its largest weekly rally since November 2020.
- Bitcoin's market dominance currently stands at 40.5%, with the currency exhibiting monthly profits of 3.1%.
- Studies show that 14% of all El Salvadorean businesses have transacted in BTC ever since the country legalised the digital asset as legal tender last September.
- Over the last half-month or so, crypto donations to Ukraine have amounted to approximately AUD$146 million.
Bitcoin, the world's largest cryptocurrency by total market capitalisation, has been on the rise recently, as highlighted by its weekly gains of 9%. To elaborate, the flagship crypto has wiped out its monthly losses completely while currently trading at a price point of AUD$55,471.
The ongoing surge has seen Bitcoin deliver its most lucrative "weekly close" in over a month. However, due to the ongoing political tensions between Russia and Ukraine, analysts believe things could change at any given moment. To this point, popular independent analyst Pentoshi believes that uptick will not last long and may even serve as a precursor to BTC reaching new lows in the near term.
On the other hand, there are other pundits who see things in a more bullish light, claiming that if BTC is able to stay afloat above the AUD$57,500 (US$42,500) threshold, it will most likely climb up to AUD$61,000 (US$45,000).
Also worth noting is that despite the global economic uncertainty, European stocks have been able to forge a remarkable comeback since 18 March, with prominent trade analyst Holger Zschaepitz highlighting:
"European stocks have now fully recovered from the shock of Russia's invasion of Ukraine," he noted. "Stoxx 600 dropped 10.6% from before the invasion on 24 February to a low point on 7 March. It is now right back where it started, after the biggest weekly rally since November 2020."
Lastly, if the equities market continues to flourish the way it does at the moment, Bitcoin may also be able to register solid near-to-mid term gains, especially since the crypto market has been showcasing increasing correlation with the trad-fi sector in recent months.
El Salvadorean businesses continue to adopt BTC
9 September 2021 marked a historic day for the crypto market. It was when the Central American nation of El Salvador decided to recognise BTC as legal tender within its borders. Since then, businesses throughout the nation have been adopting Bitcoin for daily transactions, with the country's Chamber of Commerce recently revealing that 14% of all local merchants have now transacted in BTC.
That said, a little over 90% of the surveyed companies noted that BTCs adoption has not had a major impact on their sales, which was the purpose of El Salvador's entire crypto adoption drive. Despite this, President Nayib Bukele recently predicted that by the close of 2022, Bitcoin will be trading at a price point of $100k with 2 or more countries also adopting the asset as legal tender.
Crypto's utility as a medium of donation shines
With Ukrainian cities facing constant shelling over the last fortnight, reports suggest that the country's financial resources are being strained to their limit. However, in the midst of all this, many cryptocurrencies (including BTC, ETH, DOT) and non-fungible tokens (NFTs) have made their presence felt, allowing people all over the globe to send across donations to help the Eastern European nation.
From a numbers standpoint, Alex Bornyakov, Ukraine's deputy minister at the ministry of digital transformation, revealed that as of a few days ago, his government had been able to accrue around AUD$135 million (US$100 million) in crypto donations.
Disclosure: The author owns a range of cryptocurrencies at the time of writing.