Bitcoin price broke $12,000 USD for the second time in three days on Wednesday as the notoriously volatile cryptocurrency develops a reputation among investors as a safe-haven currency amid concerns as the global economy heads towards recession. This takes BTC’s week-on-week gains to $2,000 USD.
Following on from 2018’s cryptocurrency crash, BTC enjoyed six months of steady increases during the first half of 2019. However, in June the price of BTC nosedived yet again with nearly $4,000 USD being knocked from its value in under a week. After some wild fluctuations over the summer months, which saw BTC’s value fluctuate between $9,000 USD and $13,000 USD, it would appear that the world’s premier cryptocurrency is back on track as share prices topped $12,000 USD for the second time this week.
While a week of positive price movements for BTC could be followed by another dive, some market speculators believe that the only way is up. One particular reason for this speculation is BTC’s emerging reputation with investors as a safe-haven amid fears that a global recession is on the horizon. According to The Block, a Bitcoin and cryptocurrency industry website, the catalyst was unusually high Bitcoin volume on Binance, the world’s largest Bitcoin and crypto exchange. This could be as a result of investors seeking shelter in Bitcoin, as uncertainty hangs over traditional currencies.
Political uncertainty across the globe has had a damaging effect on traditional markets, with the ever-increasing possibility of a No-Deal Brexit and Trump’s escalating trade war with China. Yesterday, China’s yuan currency hit its lowest point in over a decade.
Mati Greenspan, senior market analyst at brokerage eToro, said, “Of course, [the falling yuan] is one possible explanation, but so is Brexit for that matter, the possibility of a no-deal Brexit could very well have people hedging themselves against the potential of another large leg down for the pound sterling.”
Other possible triggers for the bump in BTC stock include a halving in block rewards for miners of Litecoin, the world’s fourth-largest cryptocurrency by market value. This means that the number of tokens Litecoin miners receive has been cut from 25 to 12.5—known as a halvening. Halvenings are seen as a positive event for cryptocurrency prices as they tighten demand. Bitcoin will undergo a halvening in May 2020 when rewards for miners will fall from 12.5 to 6.25.