Bitcoin price has surged 49% in the last 30 days and an analyst has two main explanations for the recent upswing.
According to Fundstrat Global Advisors managing partner Tom Lee, the recent phenomenon can be attributed to the forthcoming cyclical halving in 2020 and the ongoing U.S.-China trade war.
Bitcoin as the new gold
He noted that the digital currency rallied during times when people are concerned about markets, macro risks, geopolitical, or policy.
Lee added that BTC currently acts like a “digital gold”, an investment option that averts market exposure to trade uncertainties.
Bitcoin Price Surges Above $8,000, Breaking An All Time High Since July 2018 https://t.co/4dZDhOa1xq
— ooobtc (@ooobtcExchange) May 15, 2019
2020 bitcoin cyclical milestone
Aside from trade concerns brought by the increasing tensions between the two superpowers – US and China, Lee said that the 2020 bitcoin mining having is also contributing to the bitcoin price surge.
Decentralized payment ledger that tracks BTC transaction called blockchain undergoes halving every four years. This means that the reward for ‘miners’ on the record gets cut in half so as to limit new BTC creations.
#bitcoin update :
1. I still believe btc will try to push the $10k area
2. In this grand cycle bitcoin MUST break out the $10k resistance, if not there could be the z wave to occur and end up at around $1.8k#Elliottwave pic.twitter.com/EhbbX3CwrO
— Julio Albert (@Julio24albert) May 25, 2019
The halving has been a catalyst for Bitcoin price surge amid supply tightening.
According to Lee, BTC has historically staged a quite huge rally into the halving due to a supply cut. Thus, the $9 million of the day-to-day sold by miners could drop on the halving date, he said.
Moving forward, Lee expects bitcoin price to continue rising. He sees the digital currency’s price to break even around $14,000. Lee believes that the market can absorb $4.5 million, and thereby drifting BTC up dramatically.
Sources: Yahoo Finance, Bitcoinist