July might have been a forgettable month for Bitcoin after six months of steady gains this year, but the cryptocurrency has made a remarkable comeback in August so far.
Bitcoin Near $12K
The rally started at the beginning of the month and has continued as the cryptocurrency seems poised to touch $12,000 per token. While the month of July saw Bitcoin price fluctuating due to a range of extraneous issues starting from criticism of the cryptocurrency by United States President Donald Trump to Facebook’s Libra, August has seen a complete reversal of sorts. According to the chief of Fundstrat and noted crypto bull Tom Lee, the current rally in Bitcoin is related to the economic risks that have originated at a global level.
He stated that earlier, the price of Bitcoin’s value used to be directly tied to the United States Dollar, and generally, the price rose as the dollar weakened. However, Bitcoin’s rally in 2019 has coincided with a period during which the dollar has been remarkably strong and hence, it proves that the cryptocurrency is definitely no longer so closely tied to the dollar. Lee stated that it has been the same with Bitcoin’s relation with gold, and this proves that Bitcoin is possibly now being used as a protection against the current global risks by investors.
Due to the wreckage in many markets that have been triggered by the United States-China trade war and other factors, many investors are now looking for safe assets in which they can park their money. Hence, many are now choosing the US dollar, bonds, gold, and Bitcoin.
The trade war between the world’s two biggest economies does not seem to be coming to an end anytime soon, and it escalated further after China devalued its currency. The Yuan is now at its lowest in a whole decade, and the continuation of the trade war could well prove to be a blessing for Bitcoin.
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