This is what's causing the latest bitcoin price surge - Bitcoin and Altcoins News


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May 20, 2019

This is what's causing the latest bitcoin price surge

The price of bitcoin is up 48% in the past 30 days.
Wondering what to make of the recent upswing? The ongoing U.S.-China trade war and a forthcoming cyclical halving in 2020 are two big reasons for the current rally, according to bitcoin bull Tom Lee, managing partner at Fundstrat Global Advisors.

Digital gold?

With volatility in global equities, cryptocurrency investors are looking to bitcoin (BTC-USD) as a safe haven investment, Lee told Yahoo Finance’s On the Move. “Interestingly,” he said, “in periods where people have been worried about markets, or macro risks, or policy, or geopolitical, we've seen bitcoin rally.”
Bitcoin at the moment is truly acting like “digital gold,” offering an investment that avoids exposure to markets impacted by trade uncertainty, Lee said.
Golden Bitcoins

2020 bitcoin mining halving

In addition to a bump from China trade concerns, bitcoin is also approaching a cyclical milestone. Every four years, the bitcoin blockchain — the decentralized payment rail that records all bitcoin transaction — undergoes a halving in which the reward for “miners” who record transactions on the blockchain gets cut in half as a means of limiting the creation of new bitcoins.
Historically, the halving of the mining reward has been a catalyst for the price of bitcoin as supply tightens.
“It's exactly one year from today,” Lee said. “And bitcoin has historically staged a pretty big rally into the halving, because you're really cutting supplies. So $9 million of day-to-day is sold by miners. It's going to drop to $4.5 million on the halving date.”
As for where the bitcoin price is headed next, Lee sees an upward trend: “You know, it's easy for the market to absorb $4.5 million, so bitcoin should drift up dramatically. And you know, if you look at break evens, you know, bitcoin price to break even should you know — should be around $14,000 now. So I think that's why we've had this big rally.”
Bitcoin recently cracked the $8,000 level for the first time in over a year, doubling its gains. But the current level is still a far cry from the December 2017 all-time high of nearly $20,000.
Yvette Killian is a producer for Yahoo Finance’s On The Move.
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