After peaking at $1,840, Bitcoin price stabilized in the $1,820 region earlier today on May 18. The recent surge of Bitcoin price seems to be largely affected by the economic uncertainty of the US, caused by troubles surrounding the Trump administration.
Bloomberg reported that major US stock indexes had their worst session in eight months while world’s 500 most valuable billionaires have lost $35 bln due to the Trump administration’s turmoil and the US economy’s underwhelming performance.
Amazon’s Jeff Bezos and Facebook’s Mark Zuckerberg shed $3.7 bln as the Dow Jones Industrial Average dropped by more than 370 points.
In an interview with Bloomberg, Evercore ISI Executive Dennis DeBusschere stated:
“What has been setting in over the course of the day is that political uncertainty is something that’s likely going to be with us for a significant amount of time. We may be looking at a higher volatility backdrop with a trending lower market for the next couple of months.”
Amid the economic and financial turmoil, investors have begun to protect their assets and wealth with safe haven assets such as gold and Bitcoin. While gold has gained around 1.9 percent, Bitcoin price recorded a seven percent increase to surpass the $1,820 mark, reaching closer to the current all-time high price established at $1,868.
Recently, Cointelegraph reported that gold hasn’t met the description of a safe haven asset over the past seven years. Being considered as a safe haven asset for centuries, since 2010 gold has not managed to maintain its value nor demonstrate an increase. As Cointelegraph noted, a $10,000 investment in gold back in 2010 would have led to a loss of $20, while a $10,000 investment in Bitcoin would have led to a net gain of $200 mln.
Hence, investors have started to rely on Bitcoin, which is considered to be digital gold and a settlement network, to avoid market instability and economic uncertainty. As DeBusschere noted, the US market will most likely struggle to recover throughout the next few months. If so, Bitcoin price is likely to maintain its upward trend and potentially set new all-time highs in the upcoming months.
The rise in demand toward Bitcoin in the US is evident as the US Bitcoin exchange market surpassed the Japanese Bitcoin exchange market for the first time in 2017 in terms of trading volume.
At the time of writing, Japan has reclaimed its position as the world’s largest Bitcoin exchange market with over 37 percent of the market share.