- Those who have been keeping up with the news will have heard of the Coronavirus which has become a very serious health concern in China.
- The Coronavirus is supposedly the cause of the bitcoin surging, according to some analyst commentators.
There was a significant sideways movement last year for the leading cryptocurrency. It ended up going down the wrong end of the $8k however, this week it ended up coming back and going over the key resistance level of $9k. Whereas some expected this surge to come at some point, there were many others that believed it would never happen. Those who have been keeping up with the news will have heard of the Coronavirus which has become a very serious health concern in China and it’s apparently going all around the globe. The Coronavirus is supposedly the cause of the bitcoin surging, according to some commentators.
Whereas some people believe that the Coronavirus was a key part in bitcoin rising, a former senior analyst at eToro said that the price skyrocketing has absolutely nothing to do with the pandemic. Speaking on Twitter earlier this week, Mati Greenspan gave a much more understandable explanation for bitcoin reaching such a high. He cited the United States Federal government as well as the increase in liquidity in capital markets.
Is $BTC rising because of #coronavirus?— Mati Greenspan [tweets are not trading advice] (@MatiGreenspan) January 27, 2020
Perhaps a few are buying on this narrative but what seems more likely to me is that upward pressure is a result of Fed printing & additional liquidity in capital markets.
In this case, it's acting more like a risk asset than a safe haven.
The feds in the United States print money worth billions of dollars and have done over the course of history. Last year, they printed hundreds of billions of dollars worth of currency which were added into the circulating supply. It was most likely done to reduce the value of the dollar over time as the supply continues to increase.
Bitcoin, as many of you know, has a limited supply cap of 21 million. When people come to appreciate this digital asset it is able to get more valuable thanks to this cap on supply.
It will be interesting to see how this plays out. For more news on this and other crypto updates, keep it with CryptoDaily!