The popular digital currency bitcoin seems to be undergoing a rather volatile year. Having broken its all-time high and reached the level of $1,184 at the very beginning of the year, it dropped about 22% the very next day. Now, the cryptocurrency keeps on going stronger – now it trades at $1,059, according to the CoinMarketCap.
Experts used to link the steady bitcoin price growth with the latest news from China. The country with one of the biggest trading markets for the cryptocurrency tightened requirements for cross-border transactions in an effort to fight money laundering.
However, the price rise we currently observe seems to be connected with the recent actions of President Donald Trump and not the Chinese market.
As anticipated, Trump got actively involved in policy changes in the US from the very first day of his presidency. He signs one executive order after other arousing uncertainties in the global markets. Experts admit that this drives bitcoin demand up.
Trump’s intention to set up a wall between the United States and Mexico resulted in worries about the increased taxes on remittance between two countries. People started to look for other ways to transfer money and hit upon an idea of bitcoin as a convenient way for cross-border fund transfers.
Besides, the recent ban for immigrants from seven Middle Eastern nations made a noise in the world. The companies and individuals alike are worried about its possible implications and how it is going to affect them and their business.
Possible connection between bitcoin price and Trump’s actions is admitted by many experts in the cryptocurrency community. Gavin Smith, CEO of First Global, explains: “The uncertainty in the US caused by the sudden change in travel policies and exercising an “un-American” policy of limiting immigration based on someone’s belief system has caused a reaction in the market and a drop in confidence in the dollar. Trump is a loose cannon and people are beginning to believe he will act without regard for consequence. This has resulted in the rally of safe haven assets.”
Trump’s governance has already affected gold prices having increased by $20. As people strive to protect their funds and investments from losing value, they turn to assets with inherent value. Traditionally, gold has served as a store of value for ages. Now, bitcoin is called Digital Gold and that is an important indicator of the cryptocurrency value.
Gavin also commented on the possible impact of Chinese activity on bitcoin price: “Almost all of the price movement on the Chinese exchanges is based on speculation and therefore has little lasting impact on the price of bitcoin.”
Experts enumerate situation in Europe – Brexit and Italy’s potential exit from the EU in particular – as other potential reasons for the digital currency’s price going up.