Bitcoin is still moving higher – despite the recent coronavirus outbreak which has spooked the broader capital markets.
According to Nigel Green, chief executive and founder of deVere Group, the eponymous cryptocurrency’s price is likely to continue to rise until the coronavirus peaks. Just last week, Bitcoin’s price rose 10%. It is also up 30 per cent since the end of 2019, making 2020 the best start to the year for Bitcoin since 2012.
According to reports, there have been 17,335 confirmed cases of the potentially deadly SARS-like virus, including 362 deaths. Mainland China remains the epicenter of the outbreak, although cases have been reported in more than two-dozen countries including the UK, Japan, Thailand, the U.S., Spain, Australia and Germany.
“The ongoing upward trajectory of the price of Bitcoin correlates to the spread of the coronavirus,” Green said. “The more individual cases that are identified, the more countries around the world that are affected, and the greater the impact on traditional financial markets, the higher the price of Bitcoin has jumped.”
Green posits that given this pattern, he expects Bitcoin’s price is likely to continue to rise until the coronavirus peaks which, according to a prestigious research group in Hong Kong, is likely to be in late April or early May.
“Why have investors been piling into Bitcoin recently,” he asks. “Because it is increasingly regarded as a safe-haven asset in times of uncertainty. Bitcoin, known as ‘digital gold’, shares characteristics of the traditional yellow metal including being a store of value, scarce, being perceived as being resistant to inflation, and a hedge against turmoil in traditional markets – many of which have been pushed in a tailspin since the coronavirus outbreak.”
He concludes that while the coronavirus and geopolitical tensions have certainly been underscoring the reputation of decentralized, non-sovereign, secure currencies, such as Bitcoin, as safe-havens, they are somewhat peripheral drivers for why cryptocurrencies are now regarded as the future of money.
“These key other factors include that they are digital, they are global, they solve real-life issues, big tech and institutional investors are coming off the sidelines, and worldwide demographics – the growth of the native digital generation – are on the side of crypto, meaning the future is, too,” he said.”