By CCN.com: Bitcoin bull Max Keiser has suggested that the rally which has seen Bitcoin hit another high for 2019 was likely caused by the likelihood of political chaos following the European Union parliamentary elections. The elections were held over the weekend.
In a tweet, Keiser suggested that bitcoin had assumed a safe haven role, becoming the go-to asset when risk rises. This is a role that has traditionally been played by gold and to some extent the Japanese yen.
On Monday, Bitcoin went up by over 10 percent to rise above $8,900. This is the highest point Bitcoin has reached since May 2018. It has since clawed back some of the gains and is currently trading at slightly above $8,700.
According to Reuters, all indications are that the elected body of the EU will be more fragmented. While the center-left Democrats and Progressive Alliance of Socialists as well as the center-right European people’s Party garnered the most seats, their combined numbers will not be enough to form a majority.
The reduced dominance of the moderate parties was a boost for the far-right and nationalistic parties which made gains. For the pro-EU parties to shape legislation and assign key jobs in the European Commission, they will require support. This is likely to give the Euro-skeptic parties a bigger voice. As Keiser fears, this could be a recipe for political chaos.
This is not the first time that a bitcoin rally is being tied to geopolitical events. After the cryptocurrency crossed above $8,000 for the first time this year, there were suggestions that the rally was driven by trade tensions between the United States and China.
A Forbes article earlier this month suggested that the Chinese, are turning to the ‘digital gold’. This was driven by fears that the trade war will be damaging to both the yuan and the dollar. Additionally, investors may have faced jitters in the stock markets. The article specifically stated that ‘a sliding yuan tends to be bitcoin positive’.
The founder and CEO of Digital Currency Group, Barry Silbert, also subscribes to this school of thought. Earlier this month, as trade tensions between the U.S. and China, worsened, Silbert signaled a correlation:
It’s certainly interesting that that the price [of Bitcoin] started its acceleration, moving up and to the right, when the trade discussions broke down.
Silbert further said that bitcoin is acting as a ‘non-correlated asset’ meaning that it is immune to the risks that cause the prices of other traditional assets to tumble.
Besides the U.S.-China trade war, the cryptocurrency entrepreneur also said that the price of Bitcoin rose after Britons voted to leave the EU in 2016. This was also replicated with Greece’s attempts to exit the European body:
If you look at over the past five years—when ‘Brexit,’ happened, Bitcoin went up. When ‘Grexit’ happened, Bitcoin went up.
Last modified: July 31, 2020 12:09 PM UTC