The Bitcoin, which some may have left for dead ahead of time, has returned to the charge in the spring of 2019. We tell you the reasons for the new surge in the popular cryptocurrency in recent times.
If you remember the Bitcoin bubble back in late 2017 and early 2018, surely it does not seem like a profitable product in which to invest your money, and that is that many entered the crest of the wave and saw their investment dwindle in a matter of days . However, the value of this cryptocurrency has been rising steadily and growing rapidly for several months.
Why is the new rise in the price of Bitcoin? The reference virtual currency does not stop rising and already exceeds € 7,300 valuation, historical maximum since the summer of 2018.
This new bubble has attracted the attention of locals and foreigners alike, and that is that the BTC is once again an interesting investment product, not so much because of its current value but because of what it could achieve if it continues to rise. Many think that it is time to buy tokens again if it reaches the $ 17,000 that arrived at its peak.
The reasons why the interest seems to have returned are several, although it is difficult to define exactly what this constant rise in valuation is due to.
We will try to summarize the main reasons why the price of Bitcoin has skyrocketed since last December, as can be seen in this Business Insider real-time graph.
Trade war between China and the United States
In recent months the commercial war between the two main world powers has been heating up. The United States and China have raised each other’s tariffs, something that does not benefit international trade and could harm the economies of both countries.
Of course, something bad for trade is also bad for the stock market and for investment products… traditional.
In convulsive times, money moves towards the so-called “refuge values” that practically give a safe value. Traditionally it has been gold, also the sovereign debt of countries like Germany, but now capital may have found a new place to invest in times of commercial crisis.
It’s about Bitcoin. Maybe one of the reasons for its sudden rise is this commercial war. Given the uncertainty of investing in stocks or securities whose price may fall to follow the escalation between China and the United States, it is likely that more and more people decide to gamble on a virtual market that runs separately from the rest.
Other investment products lose value
Following the thread of the aforementioned, the investment is decided by two very simple elements: risk and benefit. The greater the risk, the greater the benefit and vice versa.
If it stopped investing in BTC it was because the risks were greater than the profit, and that led to the fall. You also have to see that a year ago there would be other very profitable products.
Currently, with the fledgling trade war and the global economy growing very slowly, the virtues of Bitcoin come to light. The risk is high, but the potential benefits of a new bubble are also.
The adjustment period has ended
For almost two centuries the economy has been going through cyclical crises. They are periods of adjustment in which accounts are settled with creditors and capital flows from unprofitable products to others that are. It’s time to poke bubbles and take two steps back.
Everything indicates that in the case of Bitcoin this could have happened. A bubble was inflated that was followed by a period of adjustment or disinvestment, until now.
Not being a commodity, as would be for example raw materials, disinvestment is much easier to do, hence its price fell so quickly.