Bitcoin has had its best run for the month of January since 2013 as investors seek out the cryptocurrency as a safe-haven following the outbreak of the coronavirus from in China that is going deadlier by the day.
The world’s most popular cryptocurrency was up over 29% in January adding $39.7 billion to the amount in circulation and some are now associating Bitcoin in the same category as gold when it comes to places for parking your money in times of trouble although it does have.
“There does seem to be a lingering sensation that bitcoin may be transitioning into a traditional safe haven asset, it doesn’t seem like it’s quite there just yet, but there are clear indications that it’s at least moving in this direction.” said Mati Greespan from Quantum economics.
There are now confirmed reports that the coronavirus has been spreading to different countries which has escalated the problem to a new level and the more it spreads, the more beneficial it will be to Bitcoin.
“The ongoing upward trajectory of the price of bitcoin correlates to the spread of the coronavirus,” said Nigel Green, CEO of deVere Group
“The more individual cases that are identified, the more countries around the world that are affected, and the greater the impact on traditional financial markets, the higher the price of bitcoin has jumped.” He added.
On top of the coronavirus-related issues, there is also the technical side of bitcoin. Which is known in the financial circles as “halvening” which is due to take place in May and relates to bitcoin’s underlying technology which is known as blockchain.
As of now, miners are rewarded 12.5 bitcoin per block mined and the rewards are halved every few years. In May, the reward per miner will be cut in half again, to 6.25 new bitcoin, which will greatly reduce the amount of the cryptocurrency being released to the market.
“The bitcoin halvening as well as the recent surge fueled by pandemic fears and public market jitters is yet another reminder that bitcoin is much less risky and offers potentially outsized returns,” said Jehan Chu, co-founder of blockchain-focused venture firm Kenetic Capital.
Bitcoin “is poised for a breakout run to $15,000 by mid-2020.” He added.
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