Why the Sudden Surge In Bitcoin And What Do The Professionals Think?

Bitcoin trading has exploded in recent days. Traders and investors are ploughing funds into this cryptocurrency at a furious pace. Bitcoin hovered around the $2800 level for some time, before breaking through the critical $3,000 level in early August, and rushing towards the $4,000 resistance level.

Fiery exchanges between President Donald Trump and his opposite number in North Korea, Chairman of the Workers’ Party of Korea and Supreme Leader of the Democratic People’s Republic of Korea, Kim Jong-Un have sent traders scurrying for safe-haven financial assets like gold.

A remarkable trend has developed in this time, and Bitcoin has assumed the status of a ‘safe-haven’ alternative asset during times of geopolitical uncertainty. Japan is the latest country to begin investing heavily in BTC, and this is what helped to drive prices over the $4,000 per unit level.

Over the weekend (Friday, 11 August through Sunday, 13 August), Bitcoin broke through $4,000 per unit. It is now trading at record highs, which is remarkable given that it was trading it fractions of a penny upon inception. Current trends with Bitcoin are incredibly bullish, and the trendlines show this cryptocurrency rising further.

The $4,000 level is now a support level, as Bitcoin continues to gain $100 – $200 per day over the short-term. It is unlikely that this imperious run of form will continue throughout the month, but if geopolitical uncertainty remains Bitcoin will enjoy high levels of investor interest.

Markets will invariably correct, and traders will buy on the dip, off to profit-taking has taken place. A correction is characterized by a 20% downward revision in the price of an equity, but with Bitcoin that correction could be substantially more.

Based on recent trends, the upside potential of Bitcoin is hovering around $4228 per unit, with a downside support level at $4167. The price of BTC fluctuates wildly from one hour to the next, making it difficult to pin down any anchor points with this digital currency.

BTC Prices Fluctuate Wildly

Traders and investors are using stop losses to protect themselves from these wild fluctuations. By following the market price as Bitcoin rises, and setting stop losses at incrementally higher levels as the price rises, profits can be locked in. By 8:30 AM on Monday, 14 August 2017, BTC was trading at $4161 per unit, marginally off the downside support level. An interesting development took place on Monday, 14 August when a major cryptocurrency exchange platform named Bitbay launched in India. This digital exchange platform offers multiple cryptocurrencies including Ether, Litecoin, Bitcoin and others.

Entry into the lucrative Indian market is seen as a major boon for BTC, and given its fully regulated states in South Korea and the Philippines, the sky's the limit. More investors and traders are looking to digital currency to shore up their financial portfolios than ever before. They are seen as an alternative to traditional equities, commodities, indices and stocks trading, and given that they are relatively anonymous, cost-effective and highly lucrative – they are a viable addition to a financial portfolio.

Words from the Wise: Top Investors Leading the Way

Many investment brokers believe in tackling a multitude of new projects that have strong revenue generation potential. Bernard Edwards, a leading expert from Trade-24 believes that it is possible to rebalance a financial portfolio by including digital currency as a contrarian investment option:

‘Markets are changing rapidly. In my experience as an international investor with dozens of multimillion dollar corporations, I believe that we should not be resistant to the digital currency boom. We are seeing high levels of interest in BTC, Ethereum, Litecoin and related digital currencies, owing to the explosive growth of blockchain popularity. Rebalanced financial portfolios should accommodate for the digital currency boom, as stocks show decreased profit potential amid a slowdown on Wall Street. There is tremendous excitement about digital currencies, and this will drive prices higher. Consider that BTC is limited to just 21 million coins - this non-renewable financial resource is going to enjoy surging levels of demand.’