After a few days of losses, Bitcoin (BTC) is rising. In fact, its spiking. At time of writing, Bitcoin (BTC) is up 7.95 percent valuing the digital currency at $6.886.90. With the likelihood that Bitcoin is going to brak the key $7000 barrier in the not so distant future, let’s look at why Bitcoin (BTC) is rising. Here’s the four reasons that could be behind today’s spike:
Bitcoin (BTC) as a Safe Haven?
The trading week kicked off with losses for both the US Dollar and US Stocks. Ongoing talk of a trade war between the US and China is hitting market confidence in the world’s largest economy. Weak data releases have not helped their cause, whilst the recent relative stability in the crypto world is proving more of an attraction than the traditional safe haven – gold. With more volatility than the yellow metal, digital currencies offer investors the prospect of a better return.
The Bitfinex Effect
It’s no coincidence that Bitcoin (BTC) started to rise on Bitfinex first, before the other crypto exchanges followed suit. Bitfinex is one of the biggest exchanges with a lot of automated trades being made daily. Bitcoin (BTC) is often traded by automated systems, or bots as they are also known. This bot trading activates on any larger price movement and then amplifies it further.
Bandwagon Jumping
Once you get any sort of gain in Bitcoin, the FOMO (Fear Of Missing Out) takes over some traders. As prices start to show a decent sized gain, there are those speculators who don’t want to miss out on the next big surge, if and when it does happen.
Tether (USDT) Breaks the US Dollar Peg
Tether (USDT) is still used to provide a dollar(ish) price for Bitcoin (BTC). However, Tether is worth slightly less than the US Dollar and has lost credibility and trust since the banks withdrew their support. Trading of Tether has seen the price fall as low as 85 cents with the Kraken exchange.
