Will The Bitcoin Rally Continue In August?

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July was a particularly volatile month for Bitcoin, the market leader in both price index and market capitalization among the more than 11000 cryptocurrencies. The most expensive virtual currency which followed a downward trajectory early in the month, corrected course, recovered from the seven-month low of $29,807.35 touched on July 20, and rallied to $41,626.20 by July 31 gaining around 39.65 percent in less than two weeks.

On July 20, a global sell-off and safe-haven demand for U.S Dollar had impacted prices across asset classes, forcing the cryptocurrency to pare gains made in the seven months.

Within the crypto space, sentiment however continued to be highly tethered to news of possible acceptance of cryptocurrencies for commercial payments by mainstream businesses. The latest trigger was the speculation that Amazon may be accepting bitcoin for commercial transactions, partly on the news that the ecommerce giant on July 22 posted a job opening for a digital currency and blockchain product lead. In the euphoria that followed, the BTCUSD pair rallied to $37,337.53 on July 26, clocking a gain of 25.26 percent from the recent multi-month low hit on July 20.

Prices stayed firm despite the ecommerce giant on July 26 denying the speculative reports that it was looking to accept bitcoin payments by the end of the year. The lead cryptocurrency went on to rally by a further 11.49 percent to end the month's trading at $41,626.20. The market capitalization of Bitcoin also increased during the month, from $656.85 billion at the end of June 2021 to $781.43 billion on July 31, 2021.

Size of the Bitcoin blockchain too increased from 352.49 gigabytes at the end of June 2021 to 357.10 gigabytes on July 31, 2021. Bitcoin is currently trading at $39,395.82, down more than 5 percent from the previous close.

As concerns over the enormous carbon-footprint and environmental sustainability of bitcoin mining play out more vigorously, would investors move to the sidelines or jump the bandwagon hoping for an ecommerce embraced crypto rally, as was witnessed in July?

It is unlikely that Tesla's or Amazon's or ecommerce's influence over bitcoin prices would wane in the imminent future.

Existing investors would be earnestly hoping the emission related tweet-storms end up as much ado about nothing.

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