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QUICK TAKE: The Three Key Drivers for Bitcoin’s Price Rebound

Traders Magazine Online News, February 20, 2019

John D'Antona Jr.

Bitcoin is back, so to speak.

It looks like the battered crypto currency that was once the darling of the digital universe is finally on the verge of breaking out of the bearish sentiment that has gripped the cryptocurrency market, according to Nigel Green, chief executive of deVere Group, follow surging Bitcoin prices at the end of last week.

On Feb 8, he noted the world’s largest and original digital currency jumped around 10 per cent within 24 hours, pushing past $3,700 for the first time in three weeks.

“It was a relatively sudden jump, and, of course, positive news for those holding Bitcoin,” Green said. “However, the price only reached the top of the trading range and investors should not be popping champagne corks just yet.”

Green said that there are three likely drivers of Bitcoin’s price spike.

“First, there are widely published reports that according to a leaked interview with a commissioner, a Bitcoin ETF could imminently secure approval from the U.S. securities watchdog,” he began. ““Second, the development of the lightning network which will dramatically improve Bitcoin’s well-documented scalability issues, allowing it to move towards mass adoption.”

Lastly, Green said the 2020 Bitcoin halving is drawing near.

What is halving?

He explained that the code for mining Bitcoin halves around every four years and the next one is set for May 2020. When the code halves, miners receive 50 per cent fewer coins every few minutes.

“History shows that there is typically a considerable Bitcoin surge resulting from halving events,” Green stated. “Bitcoin is the flagship cryptocurrency and, as such, we can expect when its values climb, it will drive prices of other major digital currencies such as Ethereum and XRP.”

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