A vertical downtrend of Bitcoin last year to drop from $14,000 to $6,400 in a few months’ time gave birth to fear among investors. Investors assumed that cryptocurrency was supposed to fall further and further. But at the end of the year, the price of BTC went up higher from $185 billion to $250 billion in the month of January alone. Since December to till now, Bitcoin has rallied by 45% to $9,300, where the asset trades at right now. The sudden move got embraced with open arms by many.
Reasons stand for Bitcoin’s higher price
Thinking the ongoing economic uncertainties Shaun Djie, co-founder of DigixGlobal, is looking to the ongoing fallout of Brexit, the trade tensions between Japan and South Korea and U.S.-China conflicts. Because of some unique characteristics, Bitcoin is rapidly becoming digital gold or a digital store of value. According to Djie, coronavirus can be another reason for the rise of BTC price. Same thought got revealed by the CEO of deVere Group, Nigel Green. In Chinese stock market right after the virus spread, Bitcoin spiked 2% and investors are flocking to BTC as a safe haven investment. Bitcoin is likely benefiting from the fact that interest rates across the world are low and negative which has decreased the purchasing power of the U.S. dollar and it is said that there is a new consensus building about dollar weakness. Bitcoin and gold may continue to do well as safe haven investments.
Yet to gain
There is criticism about the rally even then all crypto assets have done well in January. Nigel thinks the price of bitcoin is likely to continue to rise until the coronavirus peaks. The virus is spreading dramatically hampering the economy and potentially presenting a case for Bitcoin to be used a safe haven as the analysts expect. Reportedly, Litecoin has begun to break out and started a massive rally that brought it hundreds of present higher as the rest of the market posted mild gains. Bitcoin is expected to break higher out of the $9,000s.