During the course of the weekend, Bitcoin, the top cryptocurrency by market cap spiked to $9,000 for the second time this year after May 30, 2019. While its surge is not something new, it is remarkable because the virtual asset had been lurking around the $7,800 and $8,000 price levels for days. But could there have been more to it than the bulls at work? Let’s take a closer look.
Bitcoin price is currently valued at $9,212, however, that’s not the best of it because on Sunday, June 16, 2019, we had quite the surprise when it spiked to $9,391 which is its highest price for the past 13 months. Generally, Bitcoin’s year-to-date high shows that it has surged by 150 percent which is a long way from its $3,100 price in December. Nonetheless, Bitcoin price movements can be tied to five major reasons.
If there’s anything the cryptocurrency community has been expecting for the past six months, it is Facebook’s soon-to-be-launched cryptocurrency called GlobalCoin. The asset has been dangled like a piece of cake for enthusiasts and it finally seemed like we were going to see what Facebook has been cooking for that long.
Specifically, June 17 was the date rumored for the launch of GlobalCoin’s whitepaper and let’s say it had a direct influence on Bitcoin price. For starters, GlobalCoin will be offered to over 2.5 billion users of Facebook Messenger, Instagram, and WhatsApp. What this means is providing the easiest means for more people to access digital assets. In one way or the other, they may also like to convert the stablecoin to Bitcoin and altcoins.
Spencer Bogart, General Partner at Blockchain Capital also feels the same when he stated on June 11, 2019, that the expected launch of GlobalCoin is a bullish catalyst for Bitcoin. According to him, it eases the friction in acquiring digital assets and as such, those holding/earning the asset can fluidly move to other assets.
On August 5, 2019, Litecoin, the fourth largest cryptocurrency by market cap will be halved and what this means is a reduction in Litecoin earned by miners. When that happens, it could potentially spike the price of the virtual asset which is usually the case in halvings. Even though the halving primarily focuses on Litecoin, it may have indirectly impacted on Bitcoin price. There are more buying hands either buying Bitcoin to convert to Litecoin and vice versa.
The U.S. China trade war is no longer news, but it has been one of the main drivers of the Bitcoin bull run in the month of May and early June. It all began when the U.S. President, Donald Trump increased the tariff for import goods that are above a certain threshold. The decision could’ve made drawn people’s interest to Bitcoin which is usually a case when there’s the fear that a particular fiat currency may be impacted by the decision.
Coinnounce’s report on June 17, 2019, revealed the opinion of JPMorgan Chase analysts who opined that Bitcoin futures contracts hold a lot of importance than the market would appreciate. Nikolaos Panigirtzoglou, one of the analysts hinted that the recent bull market could be linked to the influence of institutional investors.
While responding to the later, Alex Kruger noted that Panigirtzoglou’s opinion varies from what he had said in May. Last month, the analyst said Bitcoin’s intrinsic value can be determined using its mining cost, and Bitcoin is trading way above its intrinsic value which can trigger a dump as was the case in December 2019.
In that regard, Kruger said the analyst is only acknowledging what has been evident for months now that institutional investors have been behind Bitcoin’s recent bull run rather than retail investors which, therefore, differs from late 2017.
On June 14, 2019, Binance, a Malta-based cryptocurrency exchange announced that it will discontinue its services to U.S. customers on September 12, 2019. Shortly after the news circulated, the exchange’s native digital asset, Binance Coin (BNB) recorded a sharp drop in price. CoinMarketCap’s platform shows that it opened at $35.13 on the said date but declined to $30.94.
Alex Kruger, a Fundamental & Technical Analyst in a tweet on June 14, 2019, also outlined that if a U.S. customer wants to reduce exposure due to the expected Binance block but still have exposure to cryptocurrencies, then they could swap their BNB for BTC. If investors had adhered to this advice and sold BNB for BTC, then it can be said it significantly helped to surge Bitcoin price.