Bitcoin Surges Amid Intensifying Global Trade Tensions
Even though President Trump has termed recent US-China dialogue as ‘constructive’, most market players seem to be unhappy with the uncertainty that still surrounds global stock and foreign exchange markets. While the exact results of this uncertainty will continue to be witnessed in conventional markets, it has allowed Bitcoin, the largest cryptocurrency, to regain some of its lost value during the last few days.
Interestingly, Bitcoin gained over $1,000 this weekend, an event that last occurred in August 2018. Bitcoin was being traded at $6,290 at closing time on Friday. On Sunday, however, Bitcoin was seen trading at $7,332.80 while rising as much as to $7,445 in value. Price of the digital currency has been on the rise for sixth consecutive day and trend may continue for several days in the upcoming week as well.
The digital currency became part of the news and attracted popularity when it gained significant increased in its value. Since Dec 2014, the price of Bitcoin has doubled and it went on to hit the highest point during the last quarter of 2017 when it crossed the psychological barrier of $19,000. The price went downhill since then but a recent surge in Bitcoin price may be seen as fresh air for investors of the world’s biggest cryptocurrency.
Virtual currencies, including Bitcoin, slummed Nov-Dec 2018. One of the major reasons included an announcement by the New York Attorney General that the department was looking into $850 million cover-ups by few companies behind digital currencies. This resulted in up to 11%, one of the biggest ever, fall in the value of the digital currency market, within a matter of just one week.
However, it seems as if Bitcoin and some other virtual currencies are getting back on track. Uncertainty in other major markets has surely helped the cause. The US-China trade war, one of the biggest causes of uncertainty in the market, does not seem to be ending anytime soon. The trend may continue in the near future until both parties involved in US-China trade war reach on a rational agreement.
It is evident from rapid surges and falls in prices of virtual currencies that these can be risky investments to make. Rapid gains are surely possible but the risk of steep fall should not be ignored either. Perhaps more time is required for the virtual currency market to stabilize and allow better predictability of the trends. Nonetheless, it provides a unique and attractive alternative to investors as opposed to conventional markets.