Renewed excitement around the world’s biggest cryptocurrency was sparked on Tuesday when bitcoin soared past £6,250 ($8,000) and rocketed to levels not seen since July 2018. In its glory days of December 2017, BTC peaked at almost £15,624 ($20,000) and crypto watchers have been keeping an eye for bullish movement in the hope of positive momentum. Traders and experts have been left baffled by the recent gains, with some claiming there appears to be no obvious reason behind the boost. But one analyst suggests that fears over the impact the US-China dispute will have on the global economy may have added fuel to the bitcoin rocket.
Jesse Cohen, senior analyst at Investing.com, said investors, mostly in Asia, might have turned to the cryptocurrency as efforts to end the disagreement stalled last week.
The US ramped up the pressure by raising tariffs on a list of $200billion worth of Chinese imports to from 10 percent to 25 percent.
China retaliated with higher tariffs on a revised list of $60billion worth of American products.
Mr Cohen: “While it is hard to point at exactly what has caused the latest spike in Bitcoin prices, it’s not that far-fetched that investors, mostly in Asia, have turned to the cryptocurrency as a hedge against global political volatility arising from the ongoing trade war between Washington and Beijing.
“Bitcoin is also a valuable hedge for Chinese investors looking to protect their capital and diversify away from the renminbi, which is trading near record-lows against the dollar.”
Clement Thibault, senior analyst at Investing.com, disagreed and said he does not believe there is a link, arguing that bitcoin is not being seen as a safe haven bet for Asian investors to protect portfolio.
He said: “I don’t believe the two are connected, to be honest.
“Bitcoin is still a long way away from being a safe haven asset.
“It’s still a highly speculative asset and I wouldn’t recommend it as a safe investment.”
Another theory behind the bitcoin buzz is a blockchain and cryptocurrency conference is taking place in New York, with big investors and influential market players gathering at Consensus to network and discuss the current state of the industry.
Bitcoin had also rallied during previous Consensus conferences.
BTC is currently at $7,843.22 as of 3.30pm BST, down slightly from the high of $8,323.64 seen earlier this week.
Simon Peters, analyst at trading platform eToro, said: “Bitcoin bulls are in full force this week and there’s no shortage of catalysts.
“The ongoing buzz around Consensus, with big announcements from major US companies like Starbucks, Whole Foods and Barnes & Noble, got the community truly excited, driving Bitcoin’s price upward.
“While price has pulled back slightly as of late, if bitcoin’s strong momentum continues, we may soon breach $10,000.
“We need to remember that this surge has been a long time coming and the overarching catalyst is that adoption is growing, with prices still low compared to their all-time highs.”
Nigel Green, founder and CEO of deVere Group, predicts it is unlikely bitcoin will reach $20,000 again anytime soon, but is holding out hope on bullish sentiment sticking around.
He said: “At the moment I think it is unlikely that bitcoin will reach its all-time high of $20,000 back in December 2017.
“However, I do think this bullish sentiment and steady rises is here to stay.
“Why? Because when bitcoin crashed into public consciousness in 2017, the majority of the general public had never heard of it before.
“Now most people have, with awareness of bitcoin and other cryptocurrencies increasing all the time.
“This means that more people than ever, seeing the current and growing bullish sentiment, are likely to jump into the crypto asset due fear of missing out on another impressive rally.”
Writing in an exclusive comment piece for Express.co.uk earlier this week, Darren Parkin, editorial director at Coin Rivet, was less hopeful.
He is predicting the unsustainable rise of bitcoin will plummet soon before any hope of returning to this week’s levels.
He said: “Plenty of talk takes us to $10,000 and beyond before a fall, but there are also plenty of astute assumptions that the decade-old digital asset could find itself worth a couple of thousand dollars before a period of consolidation returns it to this week’s levels.
“Of course, it is hard to know who to trust.
“It is all mainly guesswork in an unregulated market that can be easily led by just a handful of wealthy investors.”