Bitcoin (BTC), the most well known and well valued cryptocurrency on the market, surged to reach USD to BTC exchange rate of over $4,000 Saturday. Forbes reports that the blockchain currency briefly reached USD $4,000.93 before dropping slightly to $3,912.18, reaching a new all-time-high. This comes on the heels of a series of reports warning of a complete collapse of the bitcoin market and is happening concurrently to a surge in the price of Ethereum, Bitcoin’s chief rival.
Cryptocurrencies have been performing well due to a number of factors. CryptoCoinsNews suggests that the rising fears of war between the United States and North Korea are to account for the steep rise in Bitcoin price, with investors betting on instability in the U.S stock market.
Sure and Steady Gains
According to Coindesk, the price of bitcoin rose 300 percent this year, from just over USD $1,000 to past the “milestones” of $2,000, $3,000, and now $4,000, confirming a prediction made in June by Goldman Sachs.
Cryptocurrencies, in general, are having a very big year. According to CryptoCoinsNews, the cryptocurrency markets added a “staggering” $40 billion since the beginning of August, reaching a total—and new all-time-high—of $132.5 billion. Crypto markets reached their first $40 billion in May 2017.
Financial advisors are quick to point out, however, that buying Bitcoin, or any other cryptocurrency is a risky investment, some going so far as to use the term “gamble.” They warn that markets are largely unregulated and that buyers stand to lose their entire investment.
Still, the rapid climb is making lots of people pay attention to the brand new world of digital currency.
— Charlie Bilello (@charliebilello) August 12, 2017
Cryptocurrency As Wartime Investment
The recent apocalyptic tough talking between U.S. President Donald Trump and North Korea’s Kim Jong Un could be responsible for the rise in Bitcoin prices. After North Korea threatened to launch nuclear ICBM missiles at the United States, Donald Trump responded by threatening “fire and fury like the world has never seen.” U.S. Stock markets dropped this week, due to market uncertainty in the light of such terrifying statements.
According to the South China Morning Post, investors are looking to cryptocurrencies as a safe haven if this whole situation goes sideways.
Investfeed’s Ron Cherenski explained.
“We’re seeing investors transferring their funds into cryptocurrencies as they try to diversify their risk in case of a severe downturn in the market.”
He went on to state that cryptocurrencies are attractive investments for these purposes because they are not as tied to other assets that could be impacted in the case of war.
[Featured image by Ethan Miller/Getty Images]