Coronavirus is driving the price of Bitcoin up.
It proves that bitcoin is a haven asset and that in itself is a massive use case. However, much as Bitcoin naysayers want to scorn Bitcoin, it is proven that when times get scary in countries like China and Iran, they run for BTC.
The reaction of bitcoin’s price to the coronavirus outbreak destroys forever the argument that bitcoin is useless and therefore valueless, so the only question that remains is how much is this asset worth. That depends on its many use cases.
Gold’s use cases are many, too: tradeable asset, jewellery, electronics to name but the obvious. Global supply and demand for gold means that it has a market cap of USD 7.5 trillion.
175 billion market cap for BTC, a bitcoin believer will consider bitcoin has a lot of upsides.
Bitcoin is once again having a moment.
The cryptocurrency has soared as fears about the coronavirus outbreak send shock waves throughout global stock markets.
The price of one bitcoin is now hovering around $14,500. Bitcoin is up almost 10% this week and has gained 30% since the end of 2019. It's the best start to the year for bitcoin since 2012.
Worries about the rapid spread of the coronavirus are one factor boosting bitcoin, an asset that often has gone up when investors are nervous. But it isn't the only factor helping to push bitcoin higher.
"The recent bitcoin rally can be attributed to ongoing economic uncertainties," said Shaun Djie, chief operating officer of digital token company Digix in comments e-mailed to CNN Business.
Djie cited lingering worries about US-China trade relations, Brexit concerns and political tension between Japan and South Korea as factors that have boosted bitcoin prices. But the coronavirus is the biggest catalyst as of late.
"The rise in bitcoin price correlates to the ongoing outbreak," Djie said.
In that sense, bitcoin's latest spike is similar to gold's stellar run so far this year. The yellow metal has also surged this month and is now trading at all-time highs.
Gold and bitcoin are up as investors don't seem convinced about last year's stock rally.
Bitcoin, as well as gold, is benefiting from the fact that interest rates are low (or in some cases, negative) following cuts by the Federal Reserve and many other central banks last year.
That has led to a decline in the US dollar versus other currencies over the past few months.
A weaker dollar is good for bitcoin and gold.
Bitcoin, gold and other cryptocurrencies and precious metals have historically done well when investors bet that the value of big government-backed currencies will fall.
There is a new consensus building about dollar weakness. Bitcoin and gold may continue to do well as safe haven investments.
Gold and bitcoin have become prominent alternatives for retail investors looking to safeguard their wealth.
Investors considering bitcoin as a long-term investment should probably think of bitcoin much like gold. It should be a part of a portfolio to balance wealth and have assets "outside of the system" per se.
After all, bitcoin prices are still more than 40% below the all-time high of the nearly $28,000 that they hit in December 2017 -- even though they've nearly tripled from a recent low of about $4,200 in December 2018.
With the number of different types of turmoil in the world at the moment, it certainly is time to be looking at finding safe-haven assets to park your wealth in.