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Three reasons for recent Bitcoin price spike

Tony Zerucha

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Bitcoin’s price is prepared to head north and it could take others up with it, deVere Group chief executive Nigel Green said.

A sudden 10 percent jump last week saw Bitcoin rise beyond $3,700 for the first time in three weeks, but investors should remain cautious, Mr. Green advised.

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

Mr. Green identified three keys to the recent price growth.

“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.

“Second, the development of the lightning network which will dramatically improve Bitcoin’s well-documented scalability issues, allowing it to move towards mass adoption.

“And third, the 2020 Bitcoin halving.  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.”

Bitcoin’s dominant market position has spillover effects on the rest of the market, Mr. Green concluded.

“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.”

 

Tony Zerucha

Tony Zerucha is an alternative finance journalist with more than seven years experience in the space. The author of more than 1,000 articles, Tony was named LendIt's 2018 Journalist of the Year.

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