Bitcoin鈥檚 price has soared to $10,300 on comments made on Tuesday by the U.S. Federal Reserve Chair 鈥� but there are other major factors at play driving the price, which has jumped more than 40% since the beginning of 2020.
This is the warning from Nigel Green, deVere Group CEO and founder, as the world鈥檚 largest cryptocurrency jumped more than 4% on comments made by Jerome Powell that the Fed is investing a significant amount into digital currency development.
Mr Green states: 鈥淭his is further evidence that not only all major banks, government agencies, plus most sectors including tech, entertainment and real estate, are piling into cryptocurrencies 鈥� but that central banks are too.
鈥淭he previously sceptical Fed has not, until now, admitted how rapidly digital currencies could become a systemic risk to the U.S. dollar鈥檚 status as global reserve currency.
鈥淭his is a major step in underscoring 鈥� especially to those backward-looking traditionalists 鈥� that, whether they like it or not, digital global currencies are not only the future of money, they are increasingly the present too.鈥�
He continues: 鈥淭he development from the Fed comes following news that China 鈥� a communist state and the U.S.鈥檚 main economic rival 鈥� is currently developing what has been described as an all-powerful cryptocurrency. It could be ready this year and be the world鈥檚 sovereign digital currency.鈥�
Mr Green goes on to say: 鈥淲hilst there will be minor peaks and troughs 鈥� as in all markets – I predict the overall trajectory of Bitcoin to remain upward for the next few months.
鈥淏esides increasing institutional awareness and development, other major factors driving its price advance will be coronavirus.
鈥淏itcoin鈥檚 price is likely to continue to jump until the coronavirus peaks because of the growing consensus that the digital currency is a safe-haven asset.
鈥淚ts status comes from the fact that it is a store of value, scarce, perceived as being resistant to inflation, and a hedge against turmoil in traditional markets.鈥�
He adds: 鈥淎nother major price driver will be the next halving event.
鈥淭he code for mining Bitcoin halves around every four years and the next one is set for May this year. When the code halves, miners receive 50% fewer coins every few minutes.聽 History shows that there is typically a considerable Bitcoin surge resulting from halving events.鈥�
The deVere CEO concludes: 鈥淭he Fed鈥檚 public acknowledgement of cryptocurrencies was important, but most investors have already known that major central banks around the world are developing crypto.
鈥淎s such, the main drivers for Bitcoin price for the next few months will remain coronavirus and May鈥檚 having event.鈥�
