Over the past week, many analysts including Panos Mourdoukoutas, Professor at LIU Post in New York and Columbia University, described the tension between the US and North Korea as one of the driving factors behind the recent rally of bitcoin price.
Since the beginning 2016, an increasing number of investors and traders have started to perceive and adopt bitcoin as a safe haven asset. Investors in China, the US and South Korea have begun to rely on bitcoin to avoid potential economic uncertainty and financial instability, as a means to protect their wealth.
Amidst serious international conflicts and build up of tension amongst leading economies such as the US, China, South Korea and Japan, the performance of stocks, currencies and assets tend to decline, except for safe haven assets such as gold and bitcoin. Mourdoukoutas explained that tensions in Asia have led to equity market sell-offs, leading to rising demand towards bitcoin, gold and US Treasuries. According to Mourdoukoutas, bitcoin has become the new hedge against global uncertainties.
For the most part, the assessment of Mourdoukoutas of bitcoin and the rise in the demand towards digital currencies is accurate. As a recent Business Insider report emphasized, bitcoin is immune to market volatility and international economic instability.
Hence, analysts including Mourdoukoutas have attributed the recent rally of the bitcoin price to an increase in demand from institutional and large-scale investors in the US and Asia that are looking to protect their wealth and portfolio from unexpected market instability. Considering the magnitude of the conflict between the US and North Korea, Mourdoukoutas noted that investors would rather hold bitcoin than any regional currency.
Earlier this week, the price of bitcoin surpassed $4,200, establishing its new all-time high and demonstrating the market’s overwhelming confidence in the digital currency’s ability to scale. More importantly, bitcoin has shown resilience towards the August 1 Bitcoin Cash hard fork, eliminating uncertainty in regards to a potential network split and restoring trust of investors and traders toward bitcoin.
In the upcoming weeks,, as tension amongst China, the US, North Korea and South Korea increases, the demand towards safe haven assets like bitcoin will likely increase, sustaining bitcoin’s current upward momentum.
Source : https://bitconnect.co
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