In recent months, cryptocurrencies have seen unprecedented excitement - private investors, the largest investment funds and technology companies are increasing their investments in them. There are increasing parallels with the fact that cryptocurrencies are analogous to gold, only it is not in the form of bullion in a bank vault, but in the form of a combination of numbers in a virtual wallet. That said, over the years cryptocurrencies have never found themselves - they are, to put it mildly, questionable both as currencies and as investments. The self-feeling of cryptocurrencies is easiest to determine through the rate of the most popular of them - bitcoin. The first wave of interest in it came at the end of 2016-beginning of 2017 and in a matter of months raised the price of one "coin" from several thousand dollars to almost 20 thousand. It seemed like a lot at the time, especially since the bitcoin rate rolled back just as quickly, leaving a huge mass of "investors" who bought them at their peak (often with borrowed money) to count their losses and dismantle their mining farms.
Cryptocurrencies have seen an unprecedented surge in recent months At the end of 2019, everything started all over again. It turned out that the first wave was only a warm-up - now we have seen that one bitcoin can be worth 50 thousand dollars.
The reasons for the current rise in cryptocurrencies are the same as those that are now driving up the price of most stock indices. It is the ultra-soft monetary policy of the world's two essentially major central banks - the U.S. Federal Reserve (Fed) and the European Central Bank (ECB). To help the economy because of the pandemic (in fact intermittently since the 2007 crisis) they are holding zero or negative rates and conducting quantitative easing - increasing their balance sheet and buying bonds (corporate debt) with this money. Because of this, their yields are falling, which encourages investors to invest already in stocks of companies and look for other profitable and therefore risky projects.
During the pandemic year, about $3 trillion came to the financial markets in this way; the U.S. authorities said they are planning another $1.9 trillion bailout package for the economy (all these are unprecedented amounts). This crisis has a peculiarity in "aid packages" - active budget stimulus, including direct payments to the population. They could also go on a wave of optimism and "free money" to invest in cryptocurrencies, which inflated the rate.
