Bitcoin’s surging price attributed to the rapid spread of coronavirus
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The coronavirus is a major contributor to the soaring value of Bitcoin in recent weeks, according to the CEO of the deVere Group, one of the world’s largest financial services firms.
Nigel Green, the deVere Group CEO, said he expects the cryptocurrency to rise until the virus hits its peak. In mid-December, Bitcoin was averaging around £5,500 in value, but this has climbed to over £7,000 today.
This trend correlates with theories that Bitcoin is slowly becoming a sort of 'digital gold', a safe asset that tends to rise during periods of relative uncertainty and dips when markets have greater certainty. Indeed, gold itself saw sharp gains as the coronavirus started making waves around the world and its value is still rising, albeit more slowly now than at the end of December.
Bitcoin, considered to be the world’s most influential digital currency, has gained more than 10 per cent in a week and is also up 30 per cent since the end of 2019, making 2020 the best start to the year for Bitcoin since 2012.
To date, there have been 17,335 confirmed cases of the coronavirus, a potentially deadly Sars-like virus, resulting in 362 deaths. Mainland China remains the epicentre of the outbreak, although cases have been reported in more than two dozen countries, including the UK, Japan, Thailand, the US, 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.
“In this regard, we can expect 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.”
He continues: “Why have investors been piling into Bitcoin recently? 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.”
The deVere CEO added that Bitcoin’s rise is not just market bluster but technology that has inherent value in and of itself as it solves “real-life issues” and is line with an increasingly digital world.
Green concludes: “Whilst there will be minor peaks and troughs – as in all markets - I predict the overall trajectory of Bitcoin to remain upward until such time as coronavirus peaks.”
The spread of the coronavirus has been making significant waves in the tech sector with rumours that it could even delay the next iPhone - which Apple typically releases in September or October each year - something the company has so far denied.
However, the Cupertino firm has certainly been forced to shutter all its corporate offices and 42 retail stores in mainland China for the time being, as the virus spreads rapidly across that country.
Chinese rival Huawei has also been forced to postpone its developer conference - due to take place in Shenzhen on February 11 and 12 - over safety concerns related to the virus.
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