Coming back from the long Labor Day weekend, crypto traders will be happy to learn that Bitcoin finally emerged from its crypto crypt, climbing back above $10,000 to start the week. Over the past week, we got another reminder of how intertwined Bitcoin is with global politics, and with mainstream markets, and this week, we could have more evidence of these links. What are the main causes behind bitcoin rising price?
- Wednesday’s Dip
- Bitcoin, Brexit and Hong Kong
- Bitcoin Rising Price
- The Week Ahead
Bitcoin dropped 7% last Wednesday, resulting in prices falling below $10,000 for the first time in two weeks. The bearish move persisted throughout the rest of the week and over the weekend, until Bitcoin finally recovered above the mark yesterday.
Peter Schiff, CEO of Euro Pacific, a known crypto critic, took this as evidence that Bitcoin has failed the “safe haven test,” and tweeted: “As escalating trade tensions sent global stock markets plunging, investors sought refuge in monetary safe havens. The following traditional currencies all moved higher this week: Swiss Franc, Japanese yen, and particularly gold. Yet Bitcoin prince took a drive deeper than stocks!”
While some investors turn to Bitcoin when mainstream markets are down, most analysts agree that it is too volatile to be considered a safe haven. But if this week’s Bitcoin rising price is an indicator, we have nothing to worry about.
The Brexit Bitcoin Effect
The separation of the UK from the EU will no doubt have a tremendous impact on mainstream markets. However, there will also be implications for crypto. One strong example was given last week, when Coinbase sent a notification to its European users, saying that it will move their accounts to a non-UK entity, in case of a no-deal Brexit. Yesterday, Prime Minister Boris Johson said that he still believes that a deal could be reached, however, stressed that he will do everything in his power to make sure the October 31st deadline for the divorce will not be extended.
Bitcoin to the People
The ongoing pro-democracy protests in Hong Kong have definitely attracted massive attention to the region, as demonstrators and the Chinese government have clashed repeatedly for 12 weeks. Last Thursday, Yahoo Finance reported that the organizers of the protest have been encouraging protesters to switch to decentralized non-sovereign currencies, such as Bitcoin. The move could either be a protest against China’s heavy involvement in its economy or a safeguard in case monetary measures will be taken against the demonstrators.
The Week Ahead
This Friday, Bakkt, the crypto branch of Intercontinental Exchange (ICE) will launch secure crypto storage services. Bakkt is one of the more prominent crypto players backed by a mainstream institution, and it will launch daily and monthly Bitcoin Futures contracts later this month. On Thursday, SNB Governing Board Chairman Thomas Jordan will deliver a speech titled “Currencies, Money and Digital Tokens,” which could impact the crypto market.