Go home WannaCry. Bitcoin price smashed through the $1,900 mark for the first time today, reaching a record high of $1,967.79 in the morning. Progress on the scalability front and political uncertainty impacting global currencies keep driving bitcoin forward.
Bitcoin’s market cap reached $32.161 billion today, moving $989.952 million in a 24-hour period with a circulating supply of 16,339112 BTC, according to coinmarketcap.com.
Today’s current level marks nearly a 7-point gain over the past week, more than $4 billion in market cap gain, last week’s WannaCry setback notwithstanding.
Global Currency Pushes Bitcoin Price
Global currency activity has been cited as a critical factor.
CryptoCompare data indicated the Korean won and Japanese yen have gained value and driven a 48.6-point gain in trading, according to CNBC. Recently passed legislation in Japan permits retailers to accept bitcoin legally.
Japan’s yen bitcoin market has traded at a higher level than bitcoin’s U.S. dollar, with the yen-bitcoin cross trading at $2,058 or 228,78329 yen, CNBC reported. Because the yen holds the largest share of bitcoin trading, it pushes the prices higher.
Charles Hayer, CryptoCompare CEO, said arbitrage among the fiat pairs moves markets in line with leading markets, and the volumes on the JPY and KRW pairs dominate trading with a joint 48% market share.
A Safe Investor Haven
Another factor is bitcoin’s role as a safe haven for investors concerned about political instability as well as the performance of other asset classes.
Brian Kelly, CEO of Brian Kelly Capital Management, a digital asset strategy company, said investors are buying bitcoin as a hedge against political chaos. Bitcoin faces challenges on this front since some investors consider it too volatile an asset to be a “safe haven,” but Kelly and others claim it can challenge gold as a go-to safe store of value in turbulent times. Gold futures rose nearly 2% in the last week.
U.S. equities delivered a big sell-off earlier this week before posting recovery.
Meanwhile, the political establishments in both the U.S. and Brazil are rocked by scandal.
Investors currently worry that U.S. President Donald Trump may fail in his efforts to enact tax reform, infrastructure investment and deregulation. Trump allegedly asked former FBI director James Comey to drop the investigation into Michael Flynn, the former national security advisor.
Brazil’s president, Michel Temer, reportedly allowed bribes in order to silence a witness in a corruption case.
WannaCry No Longer Matters
Earlier this week, Kelly cited the WannaCry setback as a hit to bitcoin’s sentiment. The price was in the low $1,700 range Monday evening after the WannaCry hackers demanded $300 in bitcoin within three days to unlock victims’ files, with the fines doubling afterward, then preventing access completely after seven days.
WannaCry was no longer on Kelly’s mind this morning.
Did WannaCry Actually Help Bitcoin?
While the recent WannaCry ransomware attack set back bitcoin’s price late last week, the attack could have actually worked in bitcoin’s favor. Companies began hoarding bitcoin to protect against future “ransomware” attacks, NBC news reported.
Citrix Systems, which provides cloud-based solutions for network delivery and file sharing, estimated that approximately one-third of U.K. companies purchased digital currency in 2016 in order to “regain access to important intellectual property or business critical data.”
Scalability Progress Helps Bitcoin
The “fork” debate that has rocked the bitcoin community has been alleviated thanks to a successful deployment on the Litecoin cryptocurrency that can be used with bitcoin. Litecoin’s test indicates the hard fork that would have resulted in two separate currencies in order to speed up bitcoin transactions may not be required.
Aurelien Menant, CEO at Gatecoin, a Hong Kong based cryptocurrency exchange, told CNBC that Litecoin’s alternative scaling solution bodes well for bitcoin. Menant previously said bitcoin prices should exceed $3,000 this year.
Steen Jakobsen, chief economist at Saxo Bank, predicted in December that bitcoin could hit $2,000 in 2017.
Featured image from Shutterstock.
Last modified: March 4, 2021 4:56 PM