By Yasin Ebrahim
Investing.com – Bitcoin surged to more than 16-month high Tuesday, on signs of increased demand as crypto investors continued to bet that a lower for longer interest rate environment would dent demand for fiat currencies.
Bitcoin rose 4.8% to $13,600, hitting its highest level since June 2019.
In a sign that demand has returned, the popular crypto's market cap has surged to $241.38 billion, up from $195 billion at the start of the month, as major fintech players like PayPal Holdings Inc (NASDAQ:PYPL) and Square Inc (NYSE:SQ) have made big bets in the crypto space.
The move higher in recent months in Bitcoin comes after the crypto's halvening in May, an event that occurs roughly every four years, leading to halvening of the bitcoins entering circulation every 10 minutes by 50%.
For the uninitiated, Bitcoin miners are users who help maintain the system by validating transactions stored in “blocks” on the network. Using high-powered computer hardware, miners validate blocks by solving a complex “puzzle." Every time a "puzzle" is solved, a reward of bitcoins is distributed to the "puzzle solver" or miner. The reward to miners was cut to 6.25 bitcoins in the halvening event in May, from 12.5 coins.
The crypto went on bull runs after both the 2012 halvening and the 2016 halvening, and the latest run higher appears to validate that trend.
With bitcoin seemingly back on track to target multi-year highs, other cryptocurrencies followed suit. Ethereum, the second largest cryptocurrency by market cap, rose 4.36% to $406.18, Bitcoin cash rose 3.24% to $265.26.
Bitcoin Cash was created in August 2017, following a split in Bitcoin’s blockchain – the digital ledger which records every bitcoin transaction – in an event know as a ‘hard fork’.
Litecoin, meanwhile, rose 3.14%% to $57.94.