January 2020 has come and gone, and the month has sparked new highs for bitcoin.
January Was a Great Month
Well, not necessarily highs, but this is the best January for bitcoin in roughly seven years. CNBC reports that since 2013, January numbers have never been particularly praiseworthy, though these past 30 days are something to get excited about.
The digital currency rose as much as 29 percent during the first month of the new year, spiking in overall market cap by just shy of $40 million. In 2013, the price of bitcoin had exploded by more than 50 percent, though since then, the first month of the year has been rather dismal for the world’s leading cryptocurrency.
Several factors, as we all know, contributed to the bitcoin price explosion. Tension between the United States and Iran was one. Fears regarding the coronavirus in China were another, while companies like CME Group offered their customers options on bitcoin futures contracts, allowing them more (institutionalized) ways to trade.
Nigel Green – the CEO of deVere Group – commented:
The ongoing upward trajectory of the price of bitcoin correlates to the spread of the coronavirus. 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.
Vijay Ayyar – head of business development at Luno, a popular crypto trading platform – has also stated that anticipation of the Chinese New Year led to some of the jumps in bitcoin volume and value. He states:
Post CNY (Chinese New Year) also, I think, played a big role. Lots of money sitting on the sidelines with the long weekend and last week. We saw this in our Malaysia volumes as well on the weekend, lots of fresh money coming in post the CNY break.
Jehan Wu – co-founder of Kenetic Capital – also says anticipation of May’s halving has a lot to do with it:
The bitcoin halving as well as the recent surge fueled by pandemic fears and public market jitters is yet another reminder that bitcoin is much less risky and offers potentially outsized returns.
Things Are Moving Backwards
Unfortunately, we are beginning to see some of these factors have a reverse effect on bitcoin, suddenly, as the world’s primary form of crypto is suffering pricewise a bit at the time of writing. Prior, the cryptocurrency was trading for approximately $9,400 even. Now, it has dropped into the $9,200 range.
This news follows reports that the price of oil has fallen dramatically thanks to fears of the spreading coronavirus. Nearly 400 souls have passed away from the disease, which has led to massive docks in stock shares and now oil barrels. No doubt the drops on these items is potentially wreaking havoc – albeit small – on bitcoin.