BTC reached highs in late December of nearly $20,000 before being pummelled back down to $6000 by February. The move had many investors spooked and those who entered the market in this period could have been wiped out. However, for long-term BTC holders, these declines have been seen before and are somewhat unexpected.
BTC is currently up 27% so far in April, and this is significant amid stock declines and extreme volatility in the financial markets. It is up 10% in the last week alone. BTC is having one of its best months since the December climb to almost $20,000, and it is currently trading at $9,300.
There are many reasons cited as to why BTC is on the rise. Bitcoin’s Lightning Network has practically eliminated fears of high transaction costs and slow speeds. This was a big problem until recently, even leading to a fork in the blockchain and a new cryptocurrency, Bitcoin Cash. Bitcoin Cash (BCH) is faring even better, with massive price increases and is leading the way, rising more than its counterparts.
The volatility and volume in the financial markets is likely the largest contributor to the rise in cryptocurrency price. The Yen and the Swiss Franc have also seen recent price rises, both of these currencies typically viewed as safe havens in times of economic uncertainty. Bitcoin is perceived by many as a haven against fiat currency, and it is natural that it would rise amid stock and FX market decline. The truth is that despite Bitcoin’s Lightning Network and other technical capabilities, the vast majority of volume is driven by speculation, derived mainly from political statements and economic reports.
The fact that George Soros and the Rockefellers seem to be investing in cryptocurrency also bodes well. BTC is always the cryptocurrency of choice, and the first entry into the market before diversifying into alternative cryptocurrencies. While it may lack some features, from a trading perspective, it is where the volume is, along with the value. Goldman Sachs also recently set up their own cryptocurrency trading desk. The cryptocurrency asset class is gaining credibility and regulation, which is leading to more volume and a subsequent increase in price.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.