Bitcoin’s value is all over the place this week.
The primary cryptocurrency went through an amazing rally, peaking at $13,785.25 on June 28th before suffering a sudden 12% drop. The coin’s price dipped to just over $10,500 before coming back up to just below $12,000, as of Friday morning.
In 2018, cryptocurrencies were all the rage as Bitcoin surged to $20,000 in January. This was when the cryptocurrency market was at its peak market cap, and every major coin that existed at the time reached record prices. After this peak, Bitcoin and all the other cryptos took a massive dive, and the cryptocurrency world was much more relaxed for the latter half of 2018. The Spring of 2019 has seen Bitcoin and many other cryptos come back with a vengeance, and there are several potential reasons for this.
First of all, cryptocurrencies have slowly been moving into the mainstream. Broad interest in crytpocurrencies on the part of big tech and financial services companies has led to the spotlight being placed on cryptos once again. Recent big news for cryptocurrency includes Facebook’s recent partnership with PayPal, Visa, Uber, and others in order to launch their Libra coin. This mainstream acceptance of cryptocurrency has certainly helped Bitcoin and many of the mainstream cryptos, such as Ethereum and Litecoin. In other news, many large retailers also recently started accepting multiple cryptocurrencies, including Nordstrom and Whole Foods.
Another potential reason for Bitcoin’s recent gains is economic uncertainty. Trade disputes between the US and a few of its key trade partners may be spurring investors into placing their money in a place that is seen as a safe haven from the global economy. It should be noted that this belief doesn’t quite follow reality, as a recent study in Springer titled “Market Risk & Bitcoin Returns” discovered that cryptocurrencies share the same vulnerability as other assets. There is also a shortage in supply coming up, as Bitcoin’s new supply halves every four years in order to control inflation, which may start to play a bigger roll in Bitcoin’s price next year.
