[Bitcoin Now] US Stock Market Boost and Rising Mining Difficulty Drive Uptrend

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The price of Bitcoin, the representative cryptocurrency, is showing an upward trend due to the rise in the US stock market and the increase in mining difficulty.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 11:03 AM on the 5th, the price of Bitcoin was $46,530 (approximately 56.47 million KRW), up 1.32% compared to the previous day.

The Bitcoin price rose following the increase in the US stock market. On the 4th (local time), the Nasdaq index, which is technology stock-centered and shows synchronization with Bitcoin prices, closed at 14,532.55, up 271.05 points (1.90%) from the previous trading day. The S&P 500 index, centered on large-cap stocks, rose 36.78 points (0.81%) to 4,582.64, and the Dow Jones Industrial Average closed at 34,921.88, up 103.61 points (0.30%). In particular, Twitter's stock price jumped 27% compared to the previous session following news of Elon Musk, Tesla CEO’s, stake acquisition. Tesla is known as the second-largest corporate holder of Bitcoin worldwide.

Additionally, experts have issued optimistic analyses on Bitcoin price forecasts, noting that large-scale buying is underway. According to cryptocurrency specialized media CoinDesk, cryptocurrency data firm Glassnode explained, "96,000 Bitcoins are leaving cryptocurrency exchanges every month," adding, "This indicates strong buying is taking place."

The rise in mining difficulty due to the increase in hash rate also appears to have influenced the Bitcoin price. According to cryptocurrency mining information site CoinWarz, Bitcoin’s hash rate was 233.31 exahashes per second (EH/s) on this day, compared to 227.21 EH/s the previous day. The hash rate refers to the computational processing power of the network involved in Bitcoin mining. When the hash rate increases, mining difficulty also rises. As difficulty increases, Bitcoin supply decreases, which can lead to price increases.

Meanwhile, the digital asset Fear & Greed Index operated by Dunamu, the operator of the domestic cryptocurrency exchange Upbit, recorded 59.17, indicating a 'neutral' stage. Compared to 65.48 (greed) on the 29th of last month, a week ago, it fell by 6.32. However, it is 22.79 points higher than 36.38 (fear) on the 6th of last month, one month ago. Dunamu’s digital asset Fear & Greed Index is divided into stages of 'Extreme Fear (0?20)', 'Fear (20?40)', 'Neutral (40?60)', 'Greed (60?80)', and 'Extreme Greed (80?100)'. The greed direction indicates increased interest in buying by market participants, whereas moving toward fear indicates a fear of asset decline, leading to market exits and a chain reaction of price drops.