Today, on September 25, bitcoin price surged from $3,690 to $3,950, recording a staggering 7.11 percent increase over the past 24 hours. Analysts attributed the overnight surge in the price of bitcoin to the intensifying conflict between the US and North Korea.
Major Factors: Global Markets Volatility Caused by US-North Korea Conflict
Earlier today, North Korea’s foreign minister Ri Yong-ho held an abrupt press conference in New York, accusing the US President Donald Trump of declaring war against North Korea. Ri emphasized that the “world should clearly remember” that it was the US which supposedly declared war against North Korea. Ri told reporters:
“In light of the declaration of war by Trump, all options will be on the operations table of the supreme leadership of the DPRK [North Korea].”
The North Korean government’s threats against the US and the completion of a collaborative military drill between the US and Japan in which B-1B bombers from Guam and F-15 fighter escorts from Okinawa, Japan flew over the waters of North Korea, led global stocks to plunge. More to that, reserve currencies such as the US dollar and Japanese yen declined in value.
As a result, major stock market indexes including the Dow Jones Industrial Average declined in value for three days in a row and analysts explained that stocks and assets could fall further in value if global markets volatility and economic uncertainty continue.
John Caruso, senior market strategist at RJO Futures told CNBC:
“I think the market got a little nervous about that [US bombers flying over North Korean air space]. On top of the German elections it makes the market a bit unsure right now.”
Increase in Demand Toward Bitcoin as Safe Haven Asset
For the past three weeks, bitcoin has shown resilience towards the Chinese government’s nationwide ban on local bitcoin exchanges. Still, the global bitcoin market has struggling to recover beyond its previous all-time high of $5,050, considering that the international bitcoin exchange market is still restructuring.
But, as analysts including Max Keiser and Vortex noted, in times of global markets volatility and financial instability, an increasing number of investors and traders seek safe haven assets and long-term investments that are liquid, secure, and stable.
In the past 24 hours, the bitcoin price increased by $260, after struggling to surge past the $4,000 mark over the past five days. It is likely that investors and traders in the US, Japan, and South Korea, three of the largest bitcoin exchange markets in the world in terms of daily trading volumes, are turning toward bitcoin to avoid the devaluation of assets, stock market indexes, and currencies.
Already, the US dollar and the Japanese yen have weakened and Wall Street strategists expect the value of most assets to decrease in the upcoming weeks.
Such volatility in global markets is a positive indicator of growth for bitcoin. More to that, the global bitcoin exchange market is finding stability at a rapid pace. Japan has already evolved into the largest bitcoin exchange market with around 50 percent of the market share and traders from the Chinese market have moved onto Japan, the US and South Korea.
If the conflict between the US and North Korea continue, and Japan and the South Korean government also pursue active military drills, global markets will likely decrease further in value while the bitcoin price surges to new highs.
Featured image from Shutterstock.
Last modified: May 21, 2020 9:13 AM UTC