China’s State-Run Press: Bitcoin Showing “Safe-Haven” Qualities & Surging Amidst Global Volatility
- Bitcoin showing the characteristics of safe-haven assets, attracting investors' attention
- With surge in BTC price, speculation on the rise as well
Bitcoin has gone past $10,000, now trading at $12,608 with 24 hours gains of 11.91 percent after briefly touching $13,000, making yet another high of 2019.
As the leading cryptocurrency enjoys bulls after the crypto winter of 2018, the mainstream media has also taken notice. China’s official state-run press agency Xinhua News is also reporting of this surge stating the continuous uptrend Bitcoin is seeing after breaking the $10,000 mark last week.
1/ Xinhua News (China's official state-run press agency): Bitcoin price continues to maintain momentum after breaking the $10,000 mark, but speculation has increased recently. Analysts believe that bitcoin and other crypto-currencies will have to take time to win market's trust.
— cnLedger (@cnLedger) June 26, 2019
Multiple factors are contributing to this uptrend, states Xinhua that involve an escalation of economic and trade disputes, intensifying global capital market volatility, and expected downward adjustment of the global economic growth rate.
“Bitcoin has shown the characteristics of safe-haven assets and attracted many investors' attention.”
It also mentioned Facebook releasing its new cryptocurrency Libra that the news channel says greatly increased the popularity of the market and further attracted more investors into the cryptocurrency market.
With a surge in BTC Price, Speculation Increased Recently
This surge, it states is also seeing increased market speculation and the rising short selling power.
About these speculative funds, the report talks about futures position report released by the US Commodity Futures Trading Commission last week that showed, unlike commercial position, non-commercial positions, aimed at obtaining speculative profits, in the Bitcoin futures traded on CME increased significantly along with the hedging of spot transactions.
Per the rough translation of the news report, the net short positions increased as well, indicating speculators’ being bearish on Bitcoin is heating up. Additionally, short positions also exceeded long positions.
With Bitcoin prices rising rapidly, investors should be wary of speculative risks due to being small, having a market cap of $225 billion which is about one-fifth of Microsoft’s market capitalization, and easy to manipulate and lack of regulation mechanism being established yet.
Still a Growing “grassroots experiment”
A market like Bitcoin which is highly volatile, a small trading volume can push prices up or down without much effort, said Lars Seyy Kristensen, chairman of Concordium, an American blockchain network company.
The report further talks about the market being plagued by security breaches, hacking, market fraud, and inadequate regulation citing Ernst & Young’s report on QuadrigaCX’s late CEO misappropriating client funds.
It points how Bitcoin has once again become the market’s focus. While investors are still in a divergent position with some having high hopes for “digital gold,” others that is traditional investors like Warren Buffett regard it as a “gambling machine.”
Bitcoin has a good chance to be widely used in the future, Xinhua News reported the views of Michael Graham, an analyst at Canaccord Genuity but who says still it’s a growing “grassroots experiment.”