Bitcoin, the popular cryptocurrency is known to have a negative correlation with the traditional markets. The digital currency has displayed it again today after the US markets dipped following President Donald Trump’s latest executive decisions.
The previous year ended for Bitcoin on a rather high note. The cryptocurrency’s price was above $1000, showing signs of further growth. However, given its track record as a volatile asset, its value suddenly plummeted below $900 following reports of Chinese government’s intentions to introduce cryptocurrency regulations.
There has been a lot of developments in the Chinese cryptocurrency market since then. The country’s central bank, People’s Bank of China conducted an inspection of the facilities, called for certain changes in the platforms’ operational practices and more. Since then, the market has returned to normalcy, leading to price recovery.
The recovery seems to be further accelerated by the recent developments in the United States. Ever since Donald Trump took charge of the White House, there is a sense of uncertainty among businesses. Various new regulations, including the one banning immigrants from 7 middle eastern countries and the expected changes in H-1B visa regime has caused the value of US dollar to register a fall. The loss of confidence among investors and also the drop in the US currency value is reflected in Bitcoin’s price change.
Bitcoin price surged from $920 in the morning to $950 by midday. The rise in Bitcoin price coincided with the biggest decline of US stocks so far this year. According to reports, the S&P 500 dipped 0.6 percent to register the largest one-day fall since December 28, 2016. Similarly, Dow Jones Industrial Average also experienced a 0.6 percent drop while Nasdaq Composite exhibited a 0.8 percent decline.
The market is predicted to recover, but the political uncertainty will continue to affect US and Global markets. The current conditions could work in Bitcoin’s favor, helping it regain the ground and jump back to the previously held levels.
Ref: CoinMarketCap | The Guardian | CityWire | Image: Shutterstock