Syllabus: GS-III, Subject: Science and technology, Topic: Emerging technologies, Issue: Crypto-Currency
Reason behind rise in crypto currency price:
- Market recovery: from geopolitical events like Russia – Ukraine Conflict and cryptocurrency collapses in 2022.
- Sign of regulatory openness – Approval of the first spot exchange traded funds for Bitcoin by the United States Securities and Exchange Commission.
- Increase in investor confidence and dominance in digital asset investment.
- Anticipation of the Bitcoin Halving event in April, is driving investor speculation and price increase.
| Prelims Connect (terms in News)
Bitcoin Halving: ·        Bitcoin miners receive rewards for verifying transactions and contributing to the block chain’s growth. ·        Bitcoin Halving occurs approximately every four years, reducing the mining reward by half. ·        The halving ensures a gradual release of coins, maintaining scarcity and preventing inflation. ·        Unlike fiat currencies, Bitcoin’s scarcity is governed by mathematical principles rather than human decisions. Spot Exchange: Spot markets trade commodities or other assets for immediate (or very near-term) delivery. The word “spot” refers to the trade and receipt of the good being made “on the spot”. |
