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Bitcoin hits highest level since October as markets become skittish due to coronavirus fears

Bitcoin has hit its highest level since October as the cryptocurrency gains support at a time global markets are skittish over the effect that Wuhan coronavirus may have on global trade.

Heading towards $10,000, a level that was last seen in late September, bitcoin hit a high of $9552,53 as of 8 p.m. EST before declining to $9,405.02 as of 11:10 p.m EST.

The price increase naturally has investors excited with CCN writing that “it appears that conditions are right for this metric to breakout and possibly foreshadow the next bull run.” The price, if maintained, also sees bitcoin having one of its best months in history. Bitcoin was up 21% from the beginning of the month as of Jan. 15 when it was trading around the $8,500 mark and is now up approximately 30%.

How far bitcoin will grow is, as always, open to speculation. Bitcoin does not always react in line with equities markets but is at time seen as a safe-harbor investment when equities markets are facing issues. Thomas Lee, co-founder of market research firm Fundstrat Global Advisors LLC wrote on Twitter that demand for a “safe haven” is boosting bitcoin.

Others disagree with Peter Schiff, chief executive officer of Euro Pacific Capital writing that those buying bitcoin are merely speculating that others will buy it as a safe haven.

Concerns of global trade issues may not be the only driving factor behind the bitcoin’s current rise. CME Group Bitcoin Futures, launched in December continue to grow in popularity among institutional investors. The futures contracts are notably settled in bitcoin, driving further demand for the cryptocurrency.

The forthcoming bitcoin “halving” in May may also be playing a role. The halving will see the supply of new bitcoin available through bitcoin mining halved, hence the name. The halving creates scarcity of new supply and basic economic 101 dictates that a scarcity of supply causes prices to increase.

The price of bitcoin is often compared to a rollercoaster ride and this current price spike may yet again be part of the ride. That aside, if bitcoin breaks through $10,000 again, the rise up this time around may see a return to prices last seen in 2017.

Image: Pxhere

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