Cryptocurrency investors who gambled on Bitcoin since 2018 could have the coronavirus outbreak to thank for recent gains in value, as our cryptocurrency accountants at Crawfords have seen its price rise since the first cases were reported in Europe.
Value Climbing amid Coronavirus fears
Bitcoin – probably the most well-known cryptocurrency worldwide – peaked in late 2017 at a price of around $20,000 but by the end of 2018, was trading at little more than $3,000.
It remained flat throughout the first few months of 2019 before rising again, this time to a high of around $12,000 in the summer.
By the new year it was back down around the $7,000 mark, but has posted substantial gains over recent weeks as coronavirus concerns have started to spread globally.
On February 9th it tracked back into five figures, and aside from a brief blip on February 10th, it has remained over $10,000 in the days since.
What’s in store for Bitcoin?
The figures may indicate that investors are putting funds into Bitcoin as a perceived store of value at a time when fears of an epidemic could throw other areas of the market into uncertainty.
However, Bitcoin has always been subject to considerable volatility, and the coronavirus outbreak is not the only driving force behind its value at the present time.
In May, the cryptocurrency is intended to undergo a ‘halving event’ which reduces the number of new coins available to those who ‘mine’ the currency.
Back in 2016 when this happened, Bitcoin posted significant gains and embarked on its period of exponential growth to its highest peak at the end of 2017.
At the time, it was starting from a much lower price, with less pressure from regulators like the US government, so perhaps had greater room for rapid growth.
But despite the US Treasury’s recent announcement that FinCEN, the US Financial Crimes Enforcement Network, is aiming to stop Bitcoin working like “old Swiss secret number bank accounts”, the crypto is holding firm.
Watch this space…
The Crawfords cryptocurrency accountants team is watching carefully to see what Bitcoin does next – and if you need help understanding the tax implications of investing in Bitcoin, we’re here to help with any enquiries either way.