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The latest Bitcoin rally comes along with an increase in the price of gold which has climbed as investors fret over the spreading coronavirus. Some Bitcoin analysts have pointed to geopolitical uncertainty being the cause for Bitcoin’s latest move higher.
Most of the cryptos grew on Monday amid terrible trading in Asia. After the extended Chinese New Year shutdown, mainland markets finally opened for trading. However, it was not going as it was expected.
Bitcoin price was rising as well. However, at the time of writing, it was falling 0.43% to $9,347.
Major stock markets in the Asia-Pacific region tumbled by the most since an equity bubble burst in 2015. They resumed trading Monday, in the first opportunity for many investors in China to react to the worsening virus outbreak.
On the weekend, it was reported about the first case of death caused by the virus outside of China. The People’s Bank of China announced it would pump 1.2 trillion yuan ($173.8 billion) into the economy as worries the outbreak of the coronavirus are expected to have an impact on growth.
Asian Indexes in Red Amid Coronavirus Fears
The Nikkei 225 tumbled 1.28% at 7:45 am CET, while the dollar was up 0.12% against the yen to go for 108.4820 at 7:45 am CET.
In Mainland China, the Shanghai Composite plummeted 8.25% at 7:44 am CET, while the Shenzhen Composite crashed 8.46% a minute later. Hong Kong’s Hang Seng was flat at 7:47 am CET.
The South Korean Kospi decreased 1.28% at 7:34 am CET, while Australia’s S&P/ASX 200 fell 1.46% at 7:45 am CET.
Jehan Chu, managing partner with blockchain investment and advisory firm Kenetic Capital said:
“As trust in global institutions and markets continues to deteriorate, we will see highly mobile digital assets like Bitcoin explode in value.”
Vijay Ayyar, Singapore-based head of business development at crypto exchange Luno said that the previous rise of Bitcoin was indicative of how far the largest cryptocurrency has come since it broke out of its longer-term downtrend in December. The coin is up more than 40% from its low in mid-December.
“We’re potentially seeing a final wave rally in Bitcoin with the current bullish action post the break of the downtrend. There is support around $9,250.”
Bitcoin Affected by Trade Deal, Brexit and Coronavirus
The truth is, Bitcoin was continuously rising in the first few weeks of 2020 adding approximately 30% since the beginning of the year. First, it was pretty much boosted by geopolitical fears surrounding the escalating tensions between the U.S. and Iran and afterward, came fears amid fast-spreading coronavirus.
Adam Vettese, an analyst at brokerage eToro, said that Bitcoin and cryptocurrency analysts see the $10,000 mark as the next “barrier.”
“With speculation that Bitcoin is on track to break the $10,000 barrier following a sustained rally … Bitcoin still sits around a healthy $9,300.”
Let’s not forget that the two crypto mining hardware manufacturers last week notified customers their shipments would be delayed at least a week because of the coronavirus quarantine in China.
Bitcoin Follows the Gold Curve
Shaun Djie, CEO of digital token company Digix agrees that the recent Bitcoin rally can be attributed to ongoing economic uncertainties. He mentioned rising worries about the U.S.-China trade deal, Brexit concerns and political tension between Japan and South Korea as factors that may have boosted Bitcoin prices.
When Djie says that the rise in Bitcoin price “correlates to the ongoing outbreak,” it can seem that the latest surge of price is the same as gold’s rocketing rise this year. The metal is now trading at a seven-year high.
Also, let’s not forget that Bitcoin, the same as gold, is benefiting from the fact that interest rates are low following cuts by the Federal Reserve and many other central banks last year. However, last month, the Fed decided to keep interest rates unchanged.